Egypt's petroleum ministry Sherif Ismail (Photo: Ahram)
Egypt’s ministry of petroleum is currently facing difficulties trying to finance needed fuel imports such as diesel and the low-quality mazut –required to operate power stations – Al-Ahram Arabic news website reported on Monday, citing an anonymous official in the ministry.
Over the past week, several areas in Egypt saw blackouts for the first time since the ouster of President Morsi as fuel quantities supplied to power units by the petroleum ministry fell short of meeting demand.
According to the official, the ministry suffers liquidity problems preventing it from covering the cost of importing petroleum products, as it is owed LE151 billion (roughly $21.6 billion) by other governmental bodies.
On a positive note for the ministry of petroleum, shipments of fuel pledged after Morsi's fall by United Arab Emirates and Saudi Arabia have arrived. However, these grants will not suffice to help Egypt meet all of its oil needs.
The ministers of petroleum, finance, and electricity will meet in the coming days to discuss how to finance the government's fuel imports, according to the official..
The current shortage in oil is exacerbated by Iraq's refusal to fulfill a pledge it made in April to supply Egypt with four million barrels of oil per month unless Cairo makes cash payments.
Similarly, Libya, which had also assured Egypt in April it would supply it with one million barrel of oil per month, declined to fulfill its promise insisting Cairo present letters of credit from international banks as a guarantee.