Egypt government steps up petrol deliveries to nation's gas stations

The Egyptian government is providing petrol stations nationwide with an additional 16,500 tonnes per day of different types of petrol in an effort to counter ongoing shortages, Al-Ahram's Arabic-language news website reported on Sunday.

Al-Ahram cited a petroleum ministry source – who preferred anonymity – as saying that the amounts to be provided would exceed the needs of Egyptian motorists.

The source added that Egypt currently produces 90 percent of its domestic petrol demand while importing 10 percent of the more expensive 95 octane, which is used in producing different types of petrol.

He added that around 52 percent of the fuel to be provided to petrol stations would be 80 octane, while 92 octane would account for 40 percent. 90 octane would account for the remaining 8 percent.

Over the last week, petrol stations nationwide have seen long lines of motorists waiting to fill up their tanks.

In April, Ahram Online interviewed then-petroleum minister Osama Kamal, who blamed ongoing fuel shortages on fuel smuggling activities caused by Egypt's post-revolution security vacuum.

Kamal estimated that smuggling and black market activity accounted for no less than 20 percent of all fuel provided by the ministry.

He also blamed users' consumption habits. "Fuel is not consumed rationally because it is sold at very cheap prices," Kamal asserted.

Shielded by government subsidies, fuel prices in Egypt remain among the cheapest in the world. The government last increased fuel prices in 2008.

One litre of diesel oil, used mainly in commercial vehicles, is currently sold at $0.15 per litre, while petrol 92 octane – used by private automobiles – is priced at a just above $0.25 per litre.

The government recently announced plans to introduce a smart-card system in July and August aimed at rationing subsidised fuel.

The new system will allow consumers to buy a limited amount of subsidised fuel, beyond which they will have to pay market prices. The system aims to reduce Egypt's annual energy subsidy bill by over LE30 billion ($4.28 billion).

Newly appointed petroleum minister Sherif Haddara has said the new system would reduce the amounts of subsidised fuel smuggled or sold on the black market.

Egypt's total energy subsidies bill is expected to reach LE100 billion in the 2013/14 fiscal year, compared to some LE120 billion forecast for this year.a