Egypt to exhaust strategic fuel reserves by month's end: Oil minister

Ahram Online, Friday 21 Jun 2013

Citing Petroleum Minister Sherif Haddara, Turkish news agency Anadulo reports that Egypt's strategic reserves of three vital fuel products will run out by end of June

Sheirf Haddara
Minister of Petroleum Sherif Hadarra (Photo: Ahram)

Egypt's strategic reserves of three vital fuel products will run out by end of this month, Turkish news agency Anadulo reported on Thursday, citing Petroleum Minister Sherif Haddara.

According to Haddara, Egypt has enough diesel fuel to last eight days, butane enough for ten days and petrol enough for 14 days.

Ministry officials declined to comment on the Anadolu report when contacted by Ahram Online.

The news agency stated that the government was currently providing the nation's gas stations with 18,000 tonnes of octane per day and 37,000 tonnes of diesel fuel, while also providing the country's power stations with 23,000 tonnes of low-quality mazut fuel.

In recent weeks and months, Egypt has seen a spate of intermittent power blackouts, which government officials have attributed to chronic fuel shortages.

Haddara said that the current fuel quantities were meant to meet national demand, attributing ongoing shortages to hoarding and smuggling activities.

Former petroleum minister Osama Kamal recently estimated that smuggling and black market activity accounted for as much as 20 percent of all fuel the ministry provides to the local market.

He also blamed bad public energy-consumption habits. "Fuel isn't consumed rationally because it's sold at very cheap prices," he said.

According to Anadolu, the Egyptian government has requested a $265 million loan from the Islamic Development Bank to finance the import of diesel in the first quarter of 2013/14.

The news website of the Muslim Brotherhood's Freedom and Justice Party quoted Supply Minister Bassem Ouda on Thursday as saying that the state's current reserves of diesel fuel were "sufficient."

In August, the government intends to introduce a smart-card fuel allocation system aimed at reducing energy subsidies. The new system will allow consumers to purchase limited amounts of subsidised fuel, beyond which they will have to pay market prices.

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

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