Egypt issues diesel tender to meet fuel gap

Egypt issues diesel tender to meet fuel gap

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Wed, 19/12/2012 - 13:35

The Egyptian General Petroleum Corporation issued on Wednesday a tender requesting 450,000 tons of diesel per month from January until March to meet the country’s fuel needs.

"These quantities are necessary to compensate for the gap between production and domestic consumption of diesel,” a leading official from the EGPC told the state-run news agency MENA.

Egypt produces only 75 percent of its annual consumption of diesel. The country has suffered from periodic fuel shortages for nearly two years. Although the government has sometimes belatedly acknowledged the problem, the EGPC has often denied it, insisting that it has supplied sufficient fuel to the governorates. Officials have often blamed the black market for eating up supplies and the media for stoking panic among drivers.

The tender announcement Wednesday came as a ship carrying 30,000 tons of diesel reached Alexandria’s Dekheila port and another ship brought 35,000 tons of diesel into Suez.

Diesel accounted for 48 percent of petroleum subsidies in the fiscal year 2011/2012, equal to more than LE55 billion (US$9 billion) of the total LE114 billion allocated for fuel subsidies.

Analysts say that a decrease in the selling price of diesel locally due to subsidies has led to the creation of a black market for the commodity. Diesel is often concealed in gas stations or fuel trucks and then sold on the local market, outside the country or to ships passing by coastal cities.