New Electricity Prices
New Electricity Prices
The August issue of Egypt Legal Update included a review of the new Electricity Law, issued in July 2015.[1] While the new law did not cause any change in the price of electricity for commercial or residential consumption, a subsequent decree issued by the Prime Minister in August 2015 did.[2] The new decree (the “Decree”) changed the price of electricity and the cost of customer services for the Year 2015/2016. The changes take effect starting 1 July 2015.
The recent changes follow a prior decision by the Prime Minister in July 2014, which had decided on a gradual increase in the price of electricity for the subsequent five years, starting from 2014/2015.[3] The new Decree changes the rate of increase in electricity prices that was originally envisioned for 2015/2016 in the older decision. On the whole, it cannot be said that there is one clear pattern in the changes introduced via the new Decision. While some of the categories described will now have to pay a price for electricity that is even higher than the one envisioned for them in the 2014 decision, others will end up paying less.
The recent Decree increases the price on energy intensive industry in particular, a category that includes petrochemical, cement and iron industries. Another significant increase in price was imposed on domestic usage in the two highest categories (651-1000 kWh/month, and over 1000 kWh/month). In contrast, electricity prices for the first three categories (0-50 kWh/month, 51-100 kWh/month, and 0-200 kWh/month) decreased significantly from the previously projected rates, keeping them at a rate precisely equal to that which was imposed in the 2014/2015 tariff.
The new Decision is a continuation of the state declared policy to reduce subsidies on electricity – a policy that has been repeatedly emphasized and which is part of the effort to reduce the budget deficit. The recent Decision in particular indicates that the government is making slight shifts to this policy by attempting to maintain its subsidies for the lower consumption categories, while significantly increasing prices for high-end consumers.
[1] Presidential Decree-Law No. 87/2015 issuing the Electricity Law, Official Gazette, Issue No. 27 (bis) (c), 8 July 2015.
[2] Prime Minister’s Decree No. 2259/2015, Official Gazette, Issue No. 33 (bis) (c), 19 August 2015.
[3] Prime Minister’s No. Decree 1257/2014, Official Gazette, Issue No. 29 (cont.), 17 July 2014.
The August issue of Egypt Legal Update included a review of the new Electricity Law, issued in July 2015.[1] While the new law did not cause any change in the price of electricity for commercial or residential consumption, a subsequent decree issued by the Prime Minister in August 2015 did.[2] The new decree (the “Decree”) changed the price of electricity and the cost of customer services for the Year 2015/2016. The changes take effect starting 1 July 2015.
The recent changes follow a prior decision by the Prime Minister in July 2014, which had decided on a gradual increase in the price of electricity for the subsequent five years, starting from 2014/2015.[3] The new Decree changes the rate of increase in electricity prices that was originally envisioned for 2015/2016 in the older decision. On the whole, it cannot be said that there is one clear pattern in the changes introduced via the new Decision. While some of the categories described will now have to pay a price for electricity that is even higher than the one envisioned for them in the 2014 decision, others will end up paying less.
The recent Decree increases the price on energy intensive industry in particular, a category that includes petrochemical, cement and iron industries. Another significant increase in price was imposed on domestic usage in the two highest categories (651-1000 kWh/month, and over 1000 kWh/month). In contrast, electricity prices for the first three categories (0-50 kWh/month, 51-100 kWh/month, and 0-200 kWh/month) decreased significantly from the previously projected rates, keeping them at a rate precisely equal to that which was imposed in the 2014/2015 tariff.
The new Decision is a continuation of the state declared policy to reduce subsidies on electricity – a policy that has been repeatedly emphasized and which is part of the effort to reduce the budget deficit. The recent Decision in particular indicates that the government is making slight shifts to this policy by attempting to maintain its subsidies for the lower consumption categories, while significantly increasing prices for high-end consumers.
[1] Presidential Decree-Law No. 87/2015 issuing the Electricity Law, Official Gazette, Issue No. 27 (bis) (c), 8 July 2015.
[2] Prime Minister’s Decree No. 2259/2015, Official Gazette, Issue No. 33 (bis) (c), 19 August 2015.
[3] Prime Minister’s No. Decree 1257/2014, Official Gazette, Issue No. 29 (cont.), 17 July 2014.