The Egyptian government is preparing to increase electricity tariff starting January 2026.
The plan is to close the gap between production costs and the consumer price, so the proposed prices will be higher by 15 to 25%, depending on consumption brackets.
“Higher-consumption segments already pay cost-reflective prices, while lower tiers continue to receive government support.”
Egypt has been carefully implementing a range of cuts in energy subsidies, although electricity as been spared. The government allocated $1.6Billion for electricity subsidies in the 2025, a 2,900% leap from the $50Million allocated in 2024 fiscal year.
In October 2025, the government increased prices of petroleum products.
Cost of electricity production in the country is directly related to prices of natural gas and mazut; with the former’s declining local production leading to increasd imports, these numbers are now deeply affected by the global markets and foreign exchange pressure. Egypt’s electricity plants consume 3.3Billion standard cubic feet of gas per day. The cost of mazut is affected by international oil prices.
Electricity tariff reviews were put on hold in August 2025, with the government prioritizing lower inflation and subsequent rate cuts over cutting down its energy subsidy bill
As inflation has generally eased, the government feels more confident to move on electricity bills; especially after the ongoing IMF mission’s visit to Egypt, which is always flagging “high cost of energy subsidies as wrongheaded”
Phasing out electricity subsidies and moving to a free electricity market is a plan that’s firmly remains in place, but government is cautious around the timeline. Higher-consumption segments already pay cost-reflective prices, while lower tiers continue to receive government support. The eventual liberalization of the electricity market will allow the state to continue supporting low-income consumers while scrapping subsidies for high-consumption brackets.
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