Energy Policy in a Price‐Regulated Developing Economy: A Study of Egypt

As with many other developing economies, Egypt pursues a policy of keeping domestic energy prices below border prices. This entails both financial subsidies to energy producers and users, and significant opportunity costs in terms of foregone foreign and government revenues. This article details the price structure and uses two models to assess the macroeconomic and microeconomic impacts of policies designed to correct the domestic/border price disparity.