DUBAI, Jan 3 (Reuters) - Egyptian Prime Minister Mostafa Madbouly said on Wednesday that raising electricity prices will reduce the sector's annual losses to 75 billion Egyptian pounds ($2.43 billion) from 90 billion.
Earlier this month, Egypt hiked the prices of several services including metro tickets, telecommunication services and electricity, as it tries to contain a budget deficit.
Electricity prices for households were raised by between 7.8% and 20.8%, depending on the usage bracket, according to local media and a source at the Egyptian Electricity Holding Company.
Industries also saw electricity prices rise, though there has been no official announcement.
Removal of power subsidies, one of the economic reforms required by the International Monetary Fund (IMF) in a series of financial support programmes, has been repeatedly delayed as Egypt has faced economic headwinds and a shortage of foreign currency.
Egypt, where there is growing demand for gas from the population of 105 million, has been grappling with power shortages since last summer when heatwaves drove up demand for cooling.
The government also started rationing electricity in public spaces, as well as importing more mazut fuel oil.
"The fuel we use to power electricity plants is being bought using U.S dollars," Madbouly noted.
Egypt's latest, $3 billion IMF programme has been stalled for months due to a lack of progress on making the exchange rate more flexible and divesting state-held assets.
Year-on-year headline inflation in Egypt eased slightly to 34.6% in November. Egypt's central bank has kept the Egyptian pound fixed at 30.95 to the dollar since March, but the pound has fallen to 50 to the dollar on the black market.
($1 = 30.8500 Egyptian pounds) (Reporting by Nayera Abdallah and Momen Atallah; Writing by Sarah El Safty; editing by Jason Neely and Nick Macfie)
