Egypt raises electricity prices as energy costs surge

Egypt has raised electricity prices for higher-use households and businesses from April, as authorities respond to rising energy costs linked to tensions in the Gulf. Officials say the move is aimed at reducing consumption while keeping supply steady. The government is trying to limit the effect on lower-income families by leaving tariffs unchanged for smaller residential users, even as import bills climb and pressure on public finances increases.

In a statement, the electricity ministry said households consuming up to 2,000 kilowatt-hours a month will see no change. Larger residential users will face increases averaging 16 percent, while commercial tariffs will rise by about 20 percent across all brackets. Officials said the adjustments are designed to manage demand during peak periods and reduce the risk of shortages affecting homes, offices and factories.

Egypt faces rising energy costs

Prime Minister Mostafa Madbouly had signaled the shift weeks earlier. In March, he said Egypt’s energy import bill had more than doubled since fighting involving the United States, Israel and Iran intensified. Higher import costs have already led the government to raise fuel prices, increase public transport fares and delay some state projects. Authorities also introduced measures to curb electricity use, including earlier closing hours for some commercial venues.

The strain on public finances remains significant. Interest payments are expected to absorb roughly half of government spending this fiscal year, leaving limited room for additional subsidies. Inflation has stayed in double digits after peaking at 38 percent in September 2023, adding to pressure on households. Rising global oil prices have further complicated policy decisions, forcing officials to balance spending restraint with the need to support growth.

The effects are becoming visible in Cairo. Some businesses that once stayed open late are closing earlier, while street lighting has been reduced in parts of the city. Shop owners say shorter operating hours are cutting into daily sales. Restaurant operators also report higher electricity bills, which they say are adding to costs already lifted by fuel and supply expenses. For many small businesses, the adjustments come as consumer spending remains cautious.

Energy demand shapes policy outlook

Egypt’s reliance on imported fuel has increased its exposure to global price swings. Electricity demand is rising by about 7 percent annually, according to Energy Minister Mahmoud Essmat, with households accounting for the largest share of consumption. That makes residential users central to conservation efforts, even as authorities try to avoid steps that would significantly raise living costs.

Tourism, a key source of foreign currency, is also under close watch. Officials say major tourist destinations have largely avoided strict restrictions, though bookings have slowed slightly amid regional uncertainty. Tourism revenue reached $17.1 billion in the 2025/26 fiscal year, up from $10.7 billion in 2021/22, based on International Monetary Fund data. While authorities still expect growth, a quieter Cairo could influence visitor sentiment if limits remain in place.

For now, Egypt is trying to contain rising energy costs without slowing economic activity. The tariff increases, combined with conservation measures, reflect an effort to keep electricity available while managing fiscal pressure. Officials say further adjustments will depend on global energy prices and domestic demand in the months ahead.