The industrial energy pricing committee is scheduled to meet Tuesday to decide whether or not a second phase of energy price increases should be applied for low-consumption industries.
The committee had agreed to postpone the second phase for one year and a half as requested by factory owners suffering the effects of the ongoing global economic downturn.
“Once the prime minister approves the move, new prices will be implemented as of 1 July,” said committee head Amr Assal.
According to a Supreme Energy Council resolution in 2008, gas prices for low-consumption industries are to be increased from US$1.25 per million British thermal units (BTUs) to US$2.65 per million BTUs, to be implemented over three phases.
The council also decided to raise high-voltage electricity prices from 14.6 piasters per kilo to 21.6 piasters per kilo, and medium-voltage electricity from 19.7 piasters to 29.5 piasters per kilo, also over three phases.
According to committee sources, the government may still delay implementation of phases two and three until 2012 in order to ease the transition for factory owners, especially in light of the fact that the prime minister has not set deadlines for each phase.
“A postponement is unlikely, particularly since the government is inclined to abolish energy subsidies as soon as possible,” noted Assal.
Sherif el-Gabali, head of the Egyptian Chamber for Chemical Industries, for his part, asked that the new prices be implemented without delay.
The government, note experts, is set to earn some LE1.5 billion from the increases while also reducing energy subsidies.
“This will help the government avoid the adverse repercussions of global energy price increases, once the local cost of energy matches that of global markets,” explained Mohamed el-Sobky, member of the ruling National Democratic Party’s energy committee.
Translated from the Arabic Edition.