Nearly eight months since President Mohamed Morsi assumed office last June and the nation seems to be far away from an economic and political recovery. A fuel crisis has taken its toll on Egyptians amid official statements that "everything is under control" and "there's no shortage in supplies". But the long queues of vehicles at fuel stations nationwide belie such claims by the Government, which has failed to meet the simplest needs of the man in the street. The Government blames a black market that benefits from fuel subsidies. The police seize thousands of litres daily on the black market. Shortages in commodities, especially fuel, ill bode a wave of price hikes that could well exacerbate the current dilemma. Crowds of people holding plastic containers at fuel stations have become an everyday scene nationwide. “I'm afraid one day there will be a black market for everything. Now there is a black market for the US dollar and fuel. There might be a black market for bread, who knows?" wonders political activist Sherif Adel, a member of the Revolutionary Youth Union. “I thought Ahmed Nazif was the worst Prime Minister in Egypt's history. Now I think Hisham Qandil deserves this title," adds Adel, referring to Nazif, who was the country's Premier from 2004 to 2011. But the crisis is taking a serious dimension as the Government readies a scheme to gradually lift fuel subsidies. Egyptian motorists are very angry at the fuel shortages, which have sent shockwaves through an already suffering market. Transportation fares have increased nationwide over the past week due to a hike in prices. Spiralling transportation costs may consequently push up the inflation rate, an economic analyst says. “The new fuel scheme will exacerbate the situation, as the prices of basic commodities will go wild. Apparently, the Government is doing its best to placate the International Monetary Fund [IMF], rather than putting an end to the suffering of the poor," says Cairo-based analyst Nashaat Sabri. Egypt is seeking a $4.8 billion loan from the IMF to help ease its financial squeeze. Rumour has it that the IMF stipulates phasing out all subsidies in a bid to slash the budget deficit. According to the new scheme, each 1600cc car would get 1,800 litres of subsidised petrol, which translates into a mileage of 60km per day, annually. The scheme includes petrol 80 RON (research octane number), 90 RON and 92 RON, while petrol 95 RON (for expensive cars) will be available at cost value. Oil subsidies cover petrol, diesel, gas oil, natural gas, kerosene and butane, according to the Egyptian General Petroleum Corporation (EGPC). “An increase in transport costs will inevitably push up prices of vegetables, fruit and all staple commodities. If the Government doesn't take serious steps to stop the price hikes, the political unrest will continue," Sabri warns. The number of cars in Egypt reached 6.4 million at the end of 2012, according to the state-run Central Agency for Public Mobilisation and Statistics (CAPMAS). There are also around 300,000 tok-toks nationwide, according to unofficial estimates. The country's proven reserves of natural gas are estimated at 77.2 trillion cubic feet (tcf), according to the Ministry of Oil. Egypt annually consumes 4.5 million tonnes of butane, 13.5 million tonnes of diesel oil, 5.7 million tonnes of petrol and 9.2 million tonnes of gas oil, according to the Ministry of Oil. Although Egypt exports natural gas to Jordan, Syria, Lebanon and Israel through Sinai-based pipelines, it is a net importer of fuel. Egypt imports 2.5 million tonnes of butane, 4.3 million tonnes of diesel oil and around 1 million tonnes of petrol annually.
