Egypt tightens oversight of petrol stations to offset diesel shortages

Ahram Online, Tuesday 29 Jan 2013

In attempt to overcome Egypt's chronic shortfall of subsidised diesel fuel, government dispatches monitors to petrol stations across country

 Egypt to tighten supervision on petrol stations to combat smuggling
Cairo hit by new fuel crisis (Photo: Bassam Al-Zoghby)

The government is stepping up its supervision of Egyptian petrol stations in an effort to ease ongoing shortfalls of diesel fuel.

Once again, long queues can be seen forming outside the nation's gas stations as several governorates across Egypt face acute diesel fuel shortages.

One eyewitness told Ahram Online that diesel fuel was "extremely scarce" in the 600-kilometre stretch of land between Cairo and the south-coastal city of Hurghada, leading to long lines that often block highways.

In an effort to offset the crisis, the government has appointed official monitors at gas stations in affected areas.

"We have already dispatched monitors to observe around 40 per cent of the gas stations in 22 of Egypt's 27 governorates," Said Mostafa, head of Petrotrade (a public-sector company that handles the supervision process), said.

Over the course of the past two years, officials have blamed recurring fuel shortages on smuggling.

Fuel is heavily subsidized in Egypt, opening the door to a lucrative black-market trade in the commodity. Diesel subsidies alone account for some LE35.7 billion (roughly $5.5 billion) of the 20012/13 state budget, with this figure expected to rise further following recent depreciations of the local currency.

Government monitors have been tasked, among other things, with ensuring that no fuel leakages take place.

"We started implementing the system in mid-2012," Mostafa explained. "We want to raise the number of stations under our supervision to 1,000 by the end of this year."

The government, meanwhile, is expected to face difficulty keeping cheap fuel available to consumers, with Egypt's budget deficit expected to soon surge to a whopping LE200 billion.

On 8 January, Reuters reported that the Egyptian government had purchased only 3 million barrels of crude oil – half of what it had been seeking – for the first quarter of 2013.

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