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Flowing at the pumps
Published in Al-Ahram Weekly on 31 - 07 - 2008

Measures have finally been taken to relieve the octane 80 crunch, Sherine Nasr reports
The Ministry of Petroleum and Mineral Resources has put an end to the self- imposed silence it diligently pursued the past several weeks with regards to the acute shortage of octane 80 gasoline. On Tuesday, a statement was issued by the ministry saying consumption of this type of economising fuel had increased by 40 per cent from May to July this year compared to the same period last year.
"During 2007-2008, consumption of different types of fuels increased considerably. Consumption of octane 80 gasoline, in particular, jumped to 1.6 million tonnes, an increase estimated at 29 per cent compared to the previous year," the statement said.
In a proactive move to contain the crisis, the ministry decided to increase the amount of octane 80 produced by Egyptian refineries to 180,000 tonnes per month, compared to 120,000 tonnes produced before the crunch. In the meantime, the ministry will re- distribute these quantities to gas stations across the country in an attempt to put an end to the chronic traffic jams that have become a common scene in neighbourhoods where gasoline 80 is sold.
The statement underlined that out of 2,530 gas stations in the country, 1,870 sell octane 80. "This means that 75 per cent of the fuelling outlets in the country are allocated to sell the product," the statement added.
According to Sameh Fahmi, minister of petroleum, many factors contributed to the significant surge in fuel consumption: the increase in the number of vehicles entering the country; more newly developed cities being constructed; and the shift made by many car drivers to octane 80 instead of the much more expensive octane 90 and 92.
The government took a number of decisions in May which, it claimed then, would help raise more funds to serve the less privileged. Among these was an increase in the price of octane 90 and 92 from LE1.30 and LE1.40 to LE1.75 and LE1.85 respectively, while maintaining the same price of octane 80 at LE0.90. As a result, many car owners resorted to the cheaper type of gasoline, causing a growing and unmet demand on this highly subsidised commodity.
According to the ministry's statement, Egypt exports the much higher octane 95 gasoline and Nafta, the main fuels used to produce other lower octane gasoline. "Ninety-six per cent of gasolines, including octane 80 are produced locally by mixing high octane gasoline and Nafta," underlined the statement.
The statement said some 50 service stations are set up every year across the country. However, many factors have affected investment, including the spiralling cost of land as well as building materials. "A new plan is now being designed in collaboration with governorates to attract more investment in setting up gas stations."

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