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Fuelling fears
Published in Al-Ahram Weekly on 17 - 02 - 2005

A sudden shortage in gasoline has prompted anxiety among consumers about an imminent price increase, Sherine Nasr reports
Consumers were recently confronted with an unexpected day-long sudden shortage in 90 octane gasoline, reported in most gas stations throughout Cairo. Rumours quickly spread about an impending increase in the price of gasoline, a politically sensitive move which has been anticipated for quite some time now.
On Wednesday 9 February, many taxi drivers as well as private car owners reported having great difficulty in finding 90 octane gasoline available. The shortage wreaked havoc in the capital's transportation network. Taxi drivers promptly reacted by refusing to drive to take passengers while mothers taking their children home from school had a hard time trying to reach their destination. "For more than two hours, I tried to stop a taxi, but in vain. Eventually, one agreed after a good deal of bargaining," said a 30-year-old mother of two who was heading from Zamalek to Faisal Street in Giza.
In the meantime, many private car owners said they had to go from one fuel station to another, however, they neither could find 90 octane gasoline nor a reasonable explanation as to why it was not available.
"Early that day, we were given notice not to sell 90 octane gasoline," said Sayed Farouk, manager of Misr fuel station at Ahmed Said Street downtown. He added that he received orders by word of mouth from inspectors of the Egyptian General Petroleum Corporation (EGPC), the authority responsible for distributing gasoline and other oil products to the two state-owned gasoline distribution companies, Misr and CO-OP, as well as the private oil marketing companies.
"All the fuelling stations in the area complied with the decision. However, in less than 24 hours, the decision was abolished in the same manner it was applied, and we resumed pumping 90 octane gasoline."
In the meantime, Prime Minister Ahmed Nazif issued a statement making it clear that the government has no intention to increase the price of 90 octane gasoline, which is currently LE1 a litre, and that this goes in line with the government's strenuous attempts to ease the economic burden on limited-income citizens.
"80 octane gasoline is available in all the stations. What happened is that some fuelling stations stopped pumping 90 octane gasoline because they were facing some technical problems," Cabinet spokesman Magdi Radi was quoted as saying.
Similar statements were made by Minister of Petroleum Sameh Fahmi on Monday before the People's Assembly. "Replacing 90 octane gasoline with 92 or 95 octane gasoline is out of the question," he said.
But the argument laid out by government officials was hardly convincing to the average Egyptian. Consumers quickly devised their own interpretation for the shortage -- the disappearance of 90 octane gasoline combined with the elaborate promotion of a more expensive 92 octane gasoline, was simply an attempt on part of the government to increase the price of gas.
According to a retail manager at ExxonMobil who preferred to remain anonymous, the government is avoiding openly declaring a rise in fuel prices, but is phasing out 90 octane gasoline to camouflage such an increase.
"The price of 90 octane gasoline will not increase, however, the cheaper product will gradually and systematically disappear from the market," said the manager, who volunteered the information that 90 octane gasoline is already no longer available in 50 major fuelling stations in Cairo and Alexandria. These stations are both public and private."
A few months ago ExxonMobil decided to stop pumping 90 octane gasoline in 17 of its "A Class" fuelling stations in Zamalek, Maadi, Heliopolis and the Ring Road.
It is worth noting that during the second quarter of last year, EGPC introduced the more expensive, 92 octane gasoline sold for LE1.40. At that time, the reasons given for introducing the new product was that it is more environmentally friendly and better suited to the specifications of modern vehicles.
"It started as an option to customers who would like to use a higher quality gasoline for their expensive vehicles. But eventually, only 92 octane gasoline will be available," he said.
Near the end of last year, the price of diesel abruptly jumped 50 per cent by government decree, rising from 40 to 60 piastres. Diesel is mostly used by buses, whether public or private, and trucks.
"The move was angrily received by the public and transportation fares were automatically raised by at least 25 per cent," said the manager.
Such reactions to fuel increases have long been studied and anticipated by public officials as well as oil experts.
It is hard to deny that the government heavily subsidises fuels. According to ExxonMobil manager, the government foots 40 per cent of the bill for each litre of 90 octane gasoline. "It is also hard to ignore that fuel prices in Egypt are much cheaper than those in other Arab countries," said the manager, who questioned a policy of subsidising gasoline mostly consumed by private car owners of the middle and upper classes.
"Support should go to those who really need it. The government will continue to subsidise 80 octane gasoline, sold for 90 piastres as it is the main fuel for taxis and minibuses."
As for 90 octane gasoline, there are strong indications that it will slowly fade into oblivion, hopefully unnoticed until it ceases to exist.


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