Egypt is currently considering re-visiting energy-dependent services’ fees for the industrial sector every six months, the minister of public business sector said yesterday.
“Two weeks ago, the Prime Minister, Mostafa Madbouly, formed a ministerial committee to study a regular pricing procedure of energy services, both gas and electricity, for the industrial sector every six months,” Hisham Tawfik told reporters.
“Energy subsidies are no longer acceptable,” Tawfik stressed.
The Egyptian government has already been reviewing domestic car fuel prices every three months in light of international prices as part of measures to cut subsidies backed by the International Monetary Fund (IMF) fund.
Egypt has been implementing extensive economic reforms under an IMF $12 billion three-year loan deal, which was signed in 2016. The programme’s aim is to reduce its budget deficit and streamline investment laws, in an attempt to encourage foreign funds.
In November 2016, the government floated the Egyptian pound causing inflation to soar. The government also slashed subsidies last year, the Treasury announced that it was planning to increase public tax revenues by 131 per cent by 2022.
Egypt’s deficit has shrunk, its national debt burden has begun to fall and foreign exchange buffers have been rebuilt, as President Abdel Fattah Al-Sisi’s austerity plan has curtailed public spending. However, the policies have added to the financial woes of many millions of Egyptians living below the poverty line, who have complained of being unable to afford basic necessities since the price jumps.