Lifting energy subsidies won’t harm industry, official says

Egyptian industry will not be affected if the government decides to lift energy subsidies, said Industrial Devleopment Authority Chief Ismail al-Nagdy Wednesday.

In statements quoted by the state-run Middle East News Agency, Nagdy also ruled out the possibility that such a move would affect foreign investments in Egypt.

Finance Minister Hazem al-Beblawy said Tuesday that the government is considering ending energy subsidies for the steel, cement, fertilizer and ceramic industries. He said the move would help reign in government spending on subsidies.

Nagdy explained that some industries can afford higher energy prices, adding that the state is entitled to take such a measure. He cited the fertilizer industry as an example, noting that the price of a ton of fertilizer is already high and that adding LE10-LE11 to make up for subsidies would not present a problem.

The fiscal 2011/2012 budget earmarks LE95 billion for energy subsidies. But energy experts and observers have called for reducing the allocations which, they allege, are sometimes granted to unworthy recipients.

Some experts recommend the Israeli model of relying on solar-powered heating equipment as a means for rationing energy consumption.

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