Egypt's fuel crisis eases as some blame tight state finances

Ahmed Feteha, Salma Hussein, Wednesday 18 Jan 2012

Queues are shrinking at Cairo's petrol stations while debate rages over the real cause of five days of serious fuel shortages

(Photo: Mai Shaheen)

Five days after it began, Egypt's petrol crisis is showing signs of easing but the real causes of the shortages that have had motorists queuing around the block remain a matter of debate.

A countrywide shortage of fuel that started in earnest Saturday has sent Egyptian car-owners rushing to the relatively few petrol stations with consistent supplies. Some retailers have resorted to setting a 20-litre limit on fuel purchases.
The government, which supplies oil to Egypt's petrol producers, says it has not reduced the volume of its deliveries and blames the shortages on rumours and panic-buying.
On Tuesday, the country's minister of petroleum said an additional 3 million litres of oil had been pumped into the market to contain the problem -- a measure that appears to have had a limited effect.
Contradicting the government's line, petrol station supervisors and company officials interviewed by Ahram Online said their daily supplies of oil from the state have fallen by as much as two-thirds.
Oil is centrally supplied by the government to all petrol companies, public and private, to produce motor fuel. Some media reports claim the government has been unable to keep pace with market needs due to cash shortages.
This explanation, however, has been repeatedly denied by officials. 
Planning Minister Fayza Aboul Naga said on Tuesday that the crisis is "artificial" in nature, pointing out that 95 per cent of petrol consumed in Egypt is made locally and there has been no slowdown in domestic production.
One source at a public petrol company told Ahram Online that the shortage of a certain imported component that is key to petrol production is causing a bottleneck in Egyptian fuel factories. Wednesday's edition of the Shorouk daily newspaper cited a source at oil firm Shell making similar claims.
Recent downgrades of Egypt's credit rating have weakened its position with international suppliers. As a result, the state is no longer able to buy on credit as it used to.
Petrol company officials say that the extra petrol supplies promised by the government have already started to flow.
"The government has indeed been pumping large quantities of oil over the past day," the head of planning at a public oil company told Ahram Online.
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