The Trade and Industry Ministry’s energy pricing committee has recommended that plans to increase energy prices for industrial projects be postponed for six months, with the possibility of future extensions if deemed necessary.
According to a committee source, the industrial sector cannot bear increased production costs in light of the ongoing global financial crisis, which many experts believe could persist for another 18 months. The source noted that a rise in production costs now would lead in turn to increased retail prices, hinder the competitiveness of local industry in global markets and result in possible worker layoffs.
The source went on to explain that the role of the pricing committee was limited to making recommendations to the council of ministers, but that Prime Minister Ahmed Nazif would take a final decision on the matter within two weeks. The committee, he added, had unanimously approved the recommendation and convinced officials at the ministries of petroleum and electricity to carry it out.
The Egyptian Federation of Industries (EFI) had earlier asked the Trade and Industry Ministry to postpone implementing the price increase.
EFI President Galal Zorba said that the repercussions of the global crisis could be expected to peak in 2010. "International consumption rates are expected to fall this year by 20 percent ," he said. "Egyptian export volumes have already begun to decline."
"The government will benefit more by supporting the industrial sector than it will from marked-up energy prices," said pricing committee president Tamer Abu Bakr. He went on to explain that the projects that were to have been charged the new prices could not be classified as energy-intensive industries per se.
Translated from the Arabic Edition.