Written by: Ahmed Abdel Salam
Prime Minister Mostafa Madbouly confirmed that Egypt is facing difficult options in dealing with the global rise in oil prices, stressing the importance of balancing between protecting citizens from high costs, maintaining economic stability, and avoiding burdening future generations with additional costs.
This came during a session titled "Egypt's Journey in Energy: National Achievements and Future Prospects" as part of the Egypt 2026 conference, where he explained that the state budget was prepared based on an oil price of $75 per barrel, while current prices have risen to about $110.
Scenarios for dealing with the energy price crisis
The Prime Minister indicated that this rise not only affects transport fuel prices but extends to natural gas used for electricity generation, placing additional pressure on the state's public finances. He reviewed three possible approaches to dealing with the crisis; the first is passing the full cost increase to citizens, as many countries have done.
He added that the second option requires the government to bear the increase entirely, either through available resources or borrowing, which leads to higher interest payments and public debt, warning that borrowing could significantly multiply future financial obligations due to the accumulation of interest.
Support and load management options
Madbouly explained that the third option consists of maintaining current budget allocations and purchasing petroleum products at high prices within available resources, though this option might only cover between 50 and 60 percent of citizens' needs, which could lead to fuel shortages at filling stations.
He also warned that a lack of resources might force the government to implement electricity load shedding for periods ranging between six and eight hours daily, confirming that the economic team holds frequent meetings to provide the necessary financial resources to pay for fuel shipments whose costs have doubled compared to the past two years.
Expansion in renewable energy
In a related context, work is accelerating in Egypt to meet renewable energy targets, as the Prime Minister pointed out that the original plan aimed for renewable energy to reach 42 percent of the energy mix by 2030, while the target was raised following presidential directives to 45 percent by 2028 and 50 percent by 2030.
He concluded by confirming that upgrading electricity grids to support the 2028 target will cost about 200 billion pounds, with the necessary funding included in the government's plan, aimed at securing basic supplies, stabilizing services, and ensuring the availability of goods in the markets.
