CAIRO: Officials at the Ministry of Electricity could neither confirm nor deny reports of an expected 7.5 increase in electricity prices in December.
“The Cabinet of Ministers is the one responsible for deciding when and how much the increase in the price of electricity will be, not the Ministry of Electricity. So I can’t deny or confirm this news as the Cabinet hasn’t announced it yet,” Ministry Spokesman Aktham Aboul Ela told Daily News Egypt.
A prominent government official told Al-Masry Al-Youm last week that the electricity bill will increase by 7.5 percent starting December.
According to Al-Masry Al-Youm, the source said that this increase is an implementation of the Cabinet of Ministers’ 2004 decree to increase the electricity bill by 25 percent over a five-year period.
According to Aboul Ela the increase was postponed in 2008 because of the global financial crisis.
The source also told Al-Masry Al-Youm that the increase, which was initially set at 5 percent each year, would be increased by 2.5 percent to reach 7.5 percent in December.
This additional 2.5 percent is to be received by the Ministry of Petroleum.
Aboul Ela said that this 2.5 percent increase on the electric bill was decided in 2007 to decrease the subsidy of energy resources supported by the ministry of finance.
“The Ministry of Petroleum gives [energy resources] to the Ministry of Electricity with special prices that are considered completely subsidized, so the Minister of Electricity gives the Ministry of Petroleum 2.5 percent (added to the electric bill) to decrease the amount of subsidy supported by the ministry of finance,” he explained.
Aboul Ela stressed that if any increase in electricity prices occur, low income citizens will be put into consideration so they aren’t affected by it.
According to MENA, Prime Minister Ahmed Nazif stressed last week that the low income sector and the small sectors would not be “burdened” by any increase in electricity prices in the coming period, following his tour in the governorate of Beni Suef to follow up and open a number of development projects in the governorate.
Aboul Ela stated that 4,82300 families, representing 23.6 percent of Egyptian families pay only 5 piasters on each kilowatt per hour (KWH), receiving a subsidy from the government of about 14 piasters on each KWH, while 9,00981 families, representing around 49 percent of Egyptian families, pay 11 piasters on each KWH, receiving a subsidy of around 8 piasters on each KWH.
The first group uses less than 50 kilowatts per hour each month, while the second group uses from 50 to 200 kilowatts per hour each month.
Aboul Ela added that when the electric consumption of the family increases the government’s subsidy on the electric bill decreases, “because electric consumption reflects the family’s income and social standard, that way the subsidy can go to the people who really need it,” he said.
“[The price of] electricity is affected by the increase in the prices of spare parts [of electric equipment and power plants], diesel and natural gas and the [employees’] salaries, because it’s a commodity , if the price of electricity stays fixed while the price of everything else goes up, the situation would be very difficult,” Aboul Ela added.