Egypt’s Ministry of Electricity has asked the cabinet for an increase in its monthly cash allocation as a result of last November’s 50% devaluation of the Egyptian pound. The plea comes as the ministry’s major capacity expansion program is beginning to deliver.
The devaluation sparked a jump in inflation, which last month hit 30%, the highest level since the peak of 35.1% in June 1986. Payments to ministries have been slow to rise in line. State oil and gas firm EGPC – responsible for covering the cost of oil subsidies – saw its monthly allocation from the finance ministry rise from $800mn to $1bn. But a further hike will likely be needed given that to Oil Minister Tarek El Molla estimates that the cost of subsidies will hit E£65bn for the financial year ending 30 June, near-double the original pounds-terms figure (see chart). (CONTINUED - 708 WORDS)