CAIRO – Egyptian motorists have been in dire straits over the past two weeks as a hike in the demand for petrol has sent shockwaves into an already suffering market. Experts and officials say it is a pseudo crisis, citing rumour-mongers and blaming it on smuggling and a mafia of profiteers. Crowds of people with plastic containers at fueling stations have added more worries to the man in the street. "Delivery delays are to blame for this inconvenience. Rumours have worsened the matter, creating a really bad situation for petrol stations," Waleed el-Bialy, a fueling station manager in central Cairo, told the Egyptian Mail. There are 2,650 fueling stations and 2000 tankers to serve them nationwide, according to official reports. Local petrol needs amount to 17 million litres per day, while supply hits 18.28 million litres, according to the Egyptian General Petroleum Corporation (EGPC). "There was mainly a shortage in 80-octane petrol. But after a while, the crisis hit also other brands, particularly 90-octane. We had hardly any petrol to sell. Some stations had none at all, which opened the door to an emerging black market," el-Bialy said. Daily demand for petrol jumped from 14 million litres to 23 million, according to EGPC. Experts said the rise in demand is the result of smuggling subsidised petrol to the neighboring Gaza Strip at a higher price. In the Mediterranean town of Alexandria earlier this week, the military police seized 4.3 million litres of diesel hidden in stores ready for smuggling. Smugglers add special chemicals to diesel fuel to turn it into liquid detergents. The smugglers then add other chemicals to convert it back to fuel, experts said. Petroleum subsidies account for nearly one quarter of Egypt's public outlays, which are forecast to exceed LE491 billion in the fiscal year (FY) 2011/2012. Oil subsidies are expected to total LE110 billion ($18.5 billion), according to the Ministry of Finance. Oil subsidies are allocated to six products: petrol, diesel, gas oil, natural gas, kerosene, and butane, according to EGPC. The State budget deficit for FY 2011/2012 is forecast to hit LE134 billion or 8.6 per cent of the gross domestic product (GDP), according to the Ministry of Finance. Hossam Arafat, the head of the Petroleum Department of the Federation of Egyptian Chambers of Commerce, attributes the escalation to an increase in the demand for 80-octane petrol. "Forty per cent of 90-octane users shifted to 80-octane due to a price discrepancy," he said. Local petrol stations sell 80-octane for LE0.90 per litre, while 90-octane sells for LE1.75. "Owners of new taxis, which originally use 90-octane, have switched to 80-octane. There has also been a rise in motor bikes and tok-toks over the past months," Arafat explained, adding that 80-octane petrol was also used as a paint dissolvent. Egypt consumes five million tonnes of petrol annually, of which 93 per cent is locally produced, according to EGPC. Roughly half of the locally refined petrol is 80-octane, according to EGPC. The number of cars in Egypt reached 5.85 million at the end of 2010, or seven per 100 people, according to the State-run Central Agency for Public Mobilisation and Statistics (CAPMAS). There are around 250,000 tok-toks nationwide, according to unofficial reports. Lack of security on Egyptian streets adds insult to injury, as many stations shut down early fearing robbery at night, consumers say. "The situation has changed; some stations in remote areas close early, afraid of being attacked by thugs," said Medhat Sidhom, a 42-year-old jeweler. "I still use 90-octane. It is hard to get 80-octane petrol. Long car queues at fuelling stations have become a daily occurrence in Cairo," Sidhom added.
