Saturday 23 June 2018

Egypt ups energy prices for low-use industries

Cairo, July 3, 2010

Egypt has raised energy prices for non energy-intensive industries as part of its plan to gradually eliminate subsidies to all industries, a statement by the trade ministry said.

Non-energy intensive industries, which account for 97 per cent of industrial activity, including sectors such as chemical production, would be charged $2 per million British thermal units (BTU) of natural gas, the statement said.

Energy-intensive industries such as steel, cement and fertilizers, will continue to be charged $3 per million BTU, but would face a 50 per cent rise in electricity prices during high consumption periods.

Flat glass, ceramic and porcelain industries will be charged $2.3 per million BTU.

The new pricing scheme, made by a committee comprising members of the trade, electricity, petroleum, investment, and finance ministries, will be presented to the Prime Minister in the coming week for implementation in the 2010-2011 fiscal year, which began July 1.

Egypt plans to eliminate subsidies to all industries by the end of 2011, after having eliminated those to energy-intensive industries. It had suspended a plan in 2007 to reduce subsidies after the onset of the 2008 global economic crisis.

Energy subsidies cost the government EGP60 billion ($10.5 billion) in fiscal year 2007/08, up from EGP57 billion in 2006/07. Of this, EGP20 billion went to energy-intensive companies.

Egypt's budget deficit burgeoned to 65 billion pounds in the seven months to Jan. 31 from 39 billion pounds in the same period a year earlier, a Finance Ministry report said in March. – Reuters

Tags: Egypt | Cairo | industries | Energy prices | BTU |

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