The government announced last week that it would no longer be supplying 90-Octane petrol to the Egyptian market owing to low demand. According to Tarek Al-Molla, chairman of the state-run Egyptian General Petroleum Corporation (EGPC), out of the 18 million litres of petrol pumped daily in the country, only 650,000 litres of 90-Octane were consumed. This represented a mere four per cent of the total quantity pumped, compared to 41 per cent for 92-Octane and 55 per cent for 80-Octane fuel, he said. Al-Molla said that the government's plan to cancel the supply of 90-Octane fuel had started six months ago, and that implementation was completed last month after the gradual withdrawal of the product from the market. He said that there was only a 10 piastre difference between 90-Octane and 92-Octane fuel, which had prompted motorists to prefer 92-Octane due to its higher quality. 90-Octane fuel caused storage problems and congestion at petrol stations, he said, adding that no complaints had been received as a result of the withdrawal of the fuel. One employee at a petrol station in Cairo said 90-Octane petrol had not been available at his station for seven months now. Demand for 90-Octane had been low, he said, and drivers had preferred to fill their tanks with 92-Octane. There are four categories of petrol on the Egyptian market: 90-Octane, 92-Octane and 80-Octane, all sold at subsidised prices, and 95-Octane sold at the cost of production after subsides on it were lifted in November 2012. 80-Octane is the cheapest type and therefore the most consumed, being sold at LE0.9 ($0.15) per litre. 90-Octane sells for LE1.75 ($0.29) and 92-Octane at LE1.85 ($0.3). Hossam Arafat, head of the General Division of Petroleum Products at the Federation of Chambers of Commerce, praised the government's move, saying that it would benefit consumers as the petrol used for making 90-Octane would now go to the more heavily consumed 80-Octane and 92-Octane. “This will help alleviate congestion at petrol stations,” he told the Weekly. Arafat said that demand for 90-Octane petrol had been low. Removing it from the market would not save money or cost additional sums because the one million litres of petrol a day used to make 90-Octane fuel would be diverted to 80-Octane and 92-Octane fuel. The move had nothing to do with energy subsidies, he said, but was related to better coordination. The government presently supplied daily quantities of eight to nine million litres of 80-Octane, six million litres of 92-Octane, and quarter of a million litres of 95-Octane, Arafat said. According to Mohamed Al-Sobki, a professor of engineering at Cairo University and former director of the Egyptian Electrical Utility and Consumer Protection Regulatory Agency, the withdrawal of 90-Octane petrol will help better regulate petroleum products as the government will now supply a smaller range. No problems will ensue from the withdrawal, he said, since most cars were now running on 92-Octane. Al-Sobki also stressed the importance of the new smart-card system, which will soon go into effect, in ensuring the better distribution of subsidised petroleum products and the rationalisation of subsidies. The energy subsidy bill stood at LE120 billion in 2012/13, and the government is pressing ahead with implementing a new smart-card system that aims to curb fuel smuggling and to rationalise petrol subsidies. The system is expected to save some LE20 billion. The Ministry of Finance said last week that the new system would be activated soon. 1.3 million cars had been registered in the new system, and one million fuel smart cards had been issued and distributed to users, it said.
