Minister of Electricity and Renewable Energy Mohamed Shaker said on Tuesday that the cabinet will approve the new tariff on electricity consumption within days.
Shaker told Daily News Egypt that the increase in electricity prices will be slight during the first three segments of consumption and will then steady increase while consumption becomes higher.
The modifications of the exchange rate between the Egyptian pound and US dollar, the changes to the price of gas imports from abroad, and the high price of equipment needed for energy consumption were some of the major factors that led to the removal of electricity subsidies gradually in order to keep pace with development. This coincides with expansion plans that would establish new stations for the production, transmission, and distribution of energy.
Shaker said it is better to provide financial subsidies to citizens, especially since the state subsidises electricity by about EGP 39bn. According to this year’s subsidy strategy, electricity should not be subsidised by over EGP 20bn.
According to the 2016/2017 restructuring programme for electricity prices for household use, the first tranche of 0 kW to 50 kW amounts to 10 piastres, from 51 kW to 100 kW amounts to 19 piastres, and from 101 kW to 200 kW amounts to 26 piastres.
The fourth tranche of 201 kW to 350 kW amounts to 35 piastres, from 351 kW to 650 kW amounts to 44 piastres, from 651 kW to 1,000 kW amounts to 71 piastres, and more than 1,000 kW amounts to of 81 piastres per kilowatt/hour.
In terms of the international arbitration for energy purchase agreements regarding the energy produced from the new and renewable energy feed in-tariff projects, the minister said the government will not comply with companies’ desires to resolve disputes through international arbitration outside Egypt. However, such arbitration should take place inside Egypt at the Cairo Regional Centre for International Commercial Arbitration (CRCICA).
In a different context, Shaker said that the second phase of the feed-in tariff projects will be inaugurated on 27 October, one day after the end of the first phase.
He admitted the first phase has suffered from certain circumstances, but the second phase will hopefully be stronger. Shaker refused to disclose information on the tariff for the second phase.