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Cooking gas crisis due to distribution: Petroleum minister

Minister comes under fire in parliament as MPs demand a quick fix to the rising prices of gas cylinders

Ahram Online, Monday 6 Feb 2012
Gas
Shortages in gas cylinders is a common feature of the winter for many Egyptians (Photo: Reuters)
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Egypt has enough butane gas cylinders to meet local consumption needs but the problem lies in inefficient distribution, the country's petroleum minister Abdallah Ghorab told parliament on Monday.

The minister was summoned before parliament by several MPs requesting information on Egypt's current shortage of cooking gas, which the majority of the country's households receive in the form of butane cylinders.
 
Some 12 million Egyptian households depend on such subsidised gas for heating and cooking purposes.
 
“The commission that is given to distributors is very little: 10 piastres on each cylinder,” Ghorab indicated. “That is why a black market appears and the number of cylinders available to citizens falls.”
 
There is no money in the budget to cover an increase in commissions for sellers, he added.
 
Butane cylinders are subsidised by an annual LE20 billion ($3.3 billion), around 20 per cent of total subsidies granted to fuel in Egypt. 
 
Official cylinder prices have not changed since 1991, according to the minister, and sit at LE2.5 per cylinder.
 
The current crisis, however, has pushed the price of a single cylinder up to LE35 or even LE50.
 
“The subsidies open opportunities for profiteering,” the minister added.
 
Misuse of a household resource by Egypt's industry is also to blame, Ghorab said, giving the example of brick factories which buy up subsidised cylinders rather than spend more on dedicated industrial gas supplies.
 
Ghorab said the government is increasing the proportion of gas cylinders assigned to industry to 20 per cent of its total production to reduce industry's dependence on household resources.
 
He also suggested direct deliveries from government warehouse to end-users, eliminating the use of intermediary dealers and reducing the changes of smuggling and profiteering.
 
Such a scheme is currently being tested in Qalubiya governorate before its introduction in other Egyptian governorates, Ghorab said.
 
The minister's solutions failed to satisfy many MPs in attendance at Monday's parliamentary session. 
 
Some complained that Egyptians were not reaping the fruits of the country's abundant natural gas reserves, asking for new infrastructure to connect more homes to gas grids.
 
Around 4.5 million households have piped natural gas, leaving 12 million others dependent on butane cylinders, according to figures cited by Ghorab.
 
"In 2011 we connected gas to 600,000 households and we plan to increase this figure to 750,000 in 2012," Ghorab explained. “But we don’t have the technical abilities to connect natural gas to all households at a higher rate.”
 
Some MPs also called for a definite timeline for natural gas to be connected to the rest of Egypt's households.
 
One MP complained that cylinders, which weigh 12.5 kilogrammes, are usually not filled to their maximum capacities, with others adding that supplies that are supposed to last 20 days run out within half that time.
 
The minister, however, did not comment on the issue.
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