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