Egypt is quietly implementing some of the most sweeping energy rationing measures in its modern history, as the knock-on effects of the Iran-Middle East conflict drive up fuel costs and expose the fragility of an economy that was already struggling under a mountain of debt.
Starting in late March, the Egyptian government ordered shops and restaurants across the country to close by 9:00 PM each night for an initial period of one month. The curfew is not primarily about security — it is about conserving power. With natural gas import bills soaring and foreign currency reserves stretched thin, Cairo has been forced to make difficult choices about who gets energy and when.
The numbers are stark. Fuel prices in Egypt have more than doubled since the escalation of tensions in the Gulf, squeezing transportation businesses, manufacturers, and households alike. The country’s monthly gas import costs have risen by hundreds of millions of dollars — a sum that, for a government running balance of payments deficits, is not easily absorbed.
Electricity prices have also risen. Egypt’s electricity ministry raised tariffs for higher-use residential consumers and commercial users starting in April, passing on at least part of the cost increase to end users. For businesses already operating on thin margins in a difficult macroeconomic environment, the additional burden is proving too much for some.
The impact on ordinary Egyptians is immediate and visceral. Reduced street lighting has made some neighbourhoods feel less safe after dark. Some families have cut back on air conditioning use even as summer approaches — a dangerous concession in a country where summer temperatures routinely exceed 40 degrees Celsius. Small business owners speak of impossible choices: absorb the higher costs and eat into already minimal profits, or pass them on to customers who can barely afford the current price of basic goods.
Egypt’s private sector is bearing the brunt. A Reuters analysis published this week showed Egypt’s non-oil private sector contracting at its sharpest pace in almost two years in March, as the Middle East conflict drove up input costs and shattered business confidence. New orders fell, employment stalled, and companies reported the most pessimistic outlook for future business conditions in recent memory.
The government has been trying to manage the crisis on multiple fronts simultaneously. Talks with the International Monetary Fund for additional financial support are ongoing, though any deal would come with painful austerity conditions attached. The Central Bank of Egypt has been managing the pound as best it can against the dollar, but dollar shortages have created bottlenecks in import supply chains that no amount of currency management can solve.
Tourism, traditionally one of Egypt’s most important foreign currency earners, has also taken a hit. The broader instability in the Middle East has made some travellers think twice about visiting the region, even Egypt’s Red Sea resorts, which are thousands of kilometres from the conflict zones.
What the coming months hold depends heavily on whether the regional situation stabilises. If oil and gas prices remain elevated, Egypt’s adjustment will need to go deeper — further tariff hikes, more aggressive energy rationing, and a continued squeeze on public spending that will push more Egyptians into hardship. The government is hoping for a diplomatic breakthrough. For now, the 9:00 PM closing time stands, and the lights in Cairo’s streets burn a little less bright.