Egypt's government will increase natural gas and electricity prices paid by heavy industries by 33 percent this month to narrow its growing budget deficit, Al-Ahram newspaper reported on Sunday.
The higher rates would be applied to steel, cement and ceramics industries and are part of a plan to shave 20 billion Egyptian pounds ($3.3 billion) off the deficit, the newspaper said, quoting finance minister Mumtaz al-Saeed.
The uprising that unseated Hosni Mubarak in February has hammered Egypt's economy, and the government has been struggling to find ways to finance its deficit as interest rates on some treasury debt soar to above 15 percent. Al-Ahram quoted the central bank governor last week as saying the deficit in the year that began on July 1 could be as high as 182 billion Egyptian pounds compared to 134 billion pounds the government had forecast in June.
This would work out to about 11 percent of gross domestic product.
Economists say cutting energy subsidies, which represent about 20 of total spending, is one of the few practical options the country has to cut the deficit. Saeed was quoted as saying the government would try not to hurt lower income groups. Most of Egypt's fuel subsidies are for gasoline and butane cooking gas.
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