Egyptian cement companies to lose energy subsidies

Egyptian cement companies to lose energy subsidies
28 August 2012

Egypt is to no longer provide subsidised energy to new cement plants, including the 14 new facilities for which licenses have already been issued, and plans to phase out subsidies to already-existing plants, the government has said.

Hatem Saleh, minister of industry and external trade, told reporters at a press conference on Sunday that the government will not be responsible for providing subsidised energy to new cement factories adding that energy prices for existing cement plants would gradually be readjusted to match those paid by the 14 new ventures.

The government has traditionally supported existing cement ventures by providing the fuel they require
to generate electricity at prices significantly lower than market rates. In their quest to reduce the budget deficit, consecutive Egyptian governments have announced plans to slash the costly subsidy.

"The subsidy reduction will include the 14 new cement factories, licenses for which have already been granted," Saleh explained.

Saleh's statements constitute the implementation of Egypt's 2012/13 budget – prepared by the previous government of Prime Minister Kamal El-Ganzouri and approved by Egypt's military council – which stipulates a 27 per cent cut in fuel subsidies to EGP70bn, down from EGP95bn in last year's budget.

The budget recommends the abrogation of all fuel subsidies for energy-intensive industries by the end of the 2012/13 fiscal year.

Similar subsidy cuts are expected in other industries, including steel and fertiliser production.

Published under Cement News

Tagged Under: Egypt Energy Electical energy