The Impact of Reducing Energy Subsidies on Energy Intensive Industries in Egypt

Hanaa Kheir-El-Din

in The Egyptian Economy

Published by American University in Cairo Press

Published in print April 2008 | ISBN: 9789774161544
Published online September 2011 | e-ISBN: 9781617970306 | DOI:
The Impact of Reducing Energy Subsidies on Energy Intensive Industries in Egypt

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This chapter investigates the potential impact of reducing energy subsidies in Egypt on energy-intensive industries. A partial equilibrium approach is applied to assess such a policy. Specifically, the chapter examines the effect of subsidy reduction on energy-driven sectors, under different scenarios of increasing prices of energy products. The chapter is organized as follows. Section 1 discusses the concept of subsidy in addition to the rationale behind the energy subsidy system. Section 2 examines the characteristics and challenges of energy subsidies in Egypt. It also assesses the fiscal burden of energy subsidies on government budget. Section 3 analyzes the partial effect of energy subsidy reduction. Finally, Section 4 sums up the main findings of the study and their policy implications.

Keywords: Egyptian economy; energy subsidies; energy policy; subsidy reduction

Chapter.  11793 words.  Illustrated.

Subjects: Political Economy

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