Debts owed by Egypt’s electricity sector to the state oil company surged to 430 billion Egyptian pounds ($9.1 billion) by early April, a person familiar with the matter told Al Manassa, as the government weighs politically sensitive power cuts against early business closures to manage a deepening energy crisis.
A source within the Ministry of Finance, speaking to Al Manassa on the condition of anonymity, revealed that the government is under mounting pressure to adopt more stringent energy conservation policies. These measures are driven by record-high global oil and gas prices and a domestic fiscal gap that has become unsustainable.
Last month, President Abdel Fattah El-Sisi highlighted the scale of the imbalance, noting that the Ministry of Electricity pays only about 100 billion pounds annually for petroleum products that cost the state 600 billion pounds to provide. This leaves the Ministry of Petroleum to shoulder a staggering 500 billion pound deficit. Previous reporting by Asharq Business Bloomberg had placed the debt at 390 billion pounds as of April 1. However, the latest figures indicate a rapid escalation.
The Finance Ministry source emphasized that the government is currently weighing its options: continuing austerity-driven conservation measures—which began following the outbreak of the American-Israeli war on Iran—or returning to the widely unpopular policy of “load shedding”.
“Returning to load shedding, as seen in previous years, is a choice that could ignite public resentment," the source said, “especially following the recent wave of inflation triggered by hikes in gasoline and diesel prices.”
In an effort to curb consumption without cutting domestic power, Prime Minister Mostafa Madbouly had issued a decree on March 27 ordering malls, restaurants, and shops to close by 9:00 pm. Following the cessation of hostilities in the Iranian conflict, the government eased these restrictions last Thursday, adjusting the mandatory closing time to 11:00 pm.
The government’s long-term strategy involves the total phase-out of electricity subsidies by the 2027-2028 fiscal year, according to the source. While limited support will remain for the lowest-consumption brackets, prices for commercial and industrial sectors are expected to climb sharply.
These moves come as Cairo struggles to balance domestic energy demand with a dwindling supply of foreign currency required to fund petroleum imports. The source noted that the crisis may force the government to accelerate its transition to renewable energy to reduce its reliance on fossil fuels and alleviate the burden on the state budget.
The fiscal strain was further evidenced last month when the government raised fuel prices across the board by three Egyptian pounds per liter, citing the global price shocks caused by regional warfare.
