The shortage of subsidised gas cylinders has spilled over into a fourth week, reports Mohamed Abdel-Baky Over the last three weeks many Egyptian families have struggled to procure the gas cylinders on which they rely for cooking. The 2,700 gas cylinder distribution outlets have daily seen queues forming as citizens gather in hope of securing the LE5 subsidised cylinders. To combat shortages, the Ministry of Petroleum is producing 1,256,000 butane gas cylinders daily, tripling monthly production. Working hours in 50 butane gas factories have been increased to three eight-hour shifts a day so they can continue production around the clock. For its part, the Ministry of Social Solidarity is seeking to break a black market in which the LE5 cylinders have been changing hands for as much as LE70 in some areas of Cairo and Giza. Minister of Social Solidarity Ali Meselhi has announced that outlets are being monitored on a daily basis and harsh penalties will be imposed on dealers taking advantage of the current shortage. A hotline has been set up and customers are being encouraged to register complaints about unscrupulous dealers. Meselhi has also proposed a new system based on electronic cards to ensure the subsidised cylinders are not sold to factories for use as fuel or sold in the black market. Hani Al-Shalqani, subsidy expert at the American University in Cairo, told Al-Ahram Weekly he remained dubious about the efficacy of such a system. "We do not have enough data on how many families need the subsidy, where they are and how the cards can be delivered," he said. Speculation that the crisis started after Algeria cut its butane exports to Egypt have been denied by both Egyptian and Algerian officials. "Algeria has continued to export butane gas to Egypt," said one Algerian diplomat. "We only rejected requests to provide additional quantities before negotiating the price of the increased amounts that we will provide," he told Al-Quds Al-Arabi, a daily published in London. He did, however, point out that Egypt was late in paying outstanding invoices. Other press reports mention that Egypt has asked Saudi Arabia to mediate between the Egyptian and Algerian government to end the gas export crisis by arranging a meeting between senior officials from both sides. The Ministry of Petroleum denies that it has requested increases in the gas it imports from Algeria. "What the Algerian official said is totally wrong. We did not ask Algeria to provide us with more gas. We have used strategic national reserves to face the shortage," says Egyptian Petroleum Authority Executive Director Abdel-Alim Taha. He adds that Egypt has always paid its bills promptly and has not approached Saudi Arabia to mediate. The Saudi Minister of Interior also denied the mediation reports. A gas company source told the Weekly gas export deals between Algeria and Egypt involve private sector companies on both sides. "The Egyptian government does not buy anything from the Algerian government. The deal is between private companies in Egypt and Sonatrak, a private company in Algeria." The source added that Egypt imports butane gas from Saudi Arabia and France in addition to Algeria and usually depends on Saudi Arabia in the event of shortages. So what is the real cause of the ongoing shortage? Some commentators point to January's seven per cent rise in consumption as small factories turned more to butane instead of diesel. The situation was then compounded by interruptions to supplies as several Egyptian and Algerian ports closed due to bad weather. Press reports suggest the Egypt has just six day's worth of butane gas supplies in reserve. Others point to the Egyptian government's gas deal with Israel. "This is not the first time we have had a butane gas shortage since 1992, yet instead of fixing it we continue to export gas to Israel at cheap prices," says Ibrahim Zahran, energy expert and advisor to several foreign oil companies. "The data that I have shows that Egypt paid $1.582 billion to import butane gas last year, while exporting 170 billion cubic metres of gas annually to Israel. If we stopped exporting the gas to them today we could save $1.4 billion a year." (see p.8 Weekly 2)
