Egypt has reduced energy subsidy allocations to around EGP 120 billion (USD 2.28 billion) in its draft 2026/2027 fiscal year budget, down from approximately EGP 150 billion (USD 2.85 billion) in the current fiscal year, according to a statement by the Ministry of Finance on Saturday, 11 April.
The reduction of roughly 20 percent comes as part of ongoing efforts to rationalise public spending and improve the efficiency of energy use.
Finance Minister Ahmed Kouchouk said the new allocations are designed to support stable energy supplies while encouraging a shift toward more sustainable sources, including renewable energy.
A significant portion of the subsidy is expected to go toward the electricity sector, alongside funding to maintain fuel availability and support ongoing infrastructure projects.
The changes are part of Egypt’s broader economic reform programme, which includes gradually reducing untargeted subsidies and redirecting resources toward more efficient spending.
Under its USD 8 billion (EGP 424.9 billion) Extended Fund Facility agreement with the International Monetary Fund, Egypt has been working to scale back energy subsidies as part of wider fiscal consolidation efforts.
Officials say the reforms aim to reduce pressure on public finances while creating space for targeted social support programmes and investment in key sectors.
The move comes as Egypt continues to balance rising energy costs with the need to ensure stable supplies and support economic activity, particularly amid ongoing volatility in global energy markets, particularly amid global energy volatility and escalating regional tensions affecting key shipping routes and fuel costs.
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