Gas station owners in Egypt deny responsibility for supply shortage
In August, Egypt discovered a new gas source in its Western Sahara desert, which would produce about 12 million cubic feet of gas per day, the gas source would be ready for use in November
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A group of 30 Cairo gas station owners demonstrated Sunday in front of Misr Petroleum, demanding proper allocation of gas and oil resources, fair commission and a change of the company’s management.
Some in Egypt have experienced a shortage of supply at a number of gas stations this past week. Earlier this month, South Sinai saw a fuel crisis that paralyzed Dahab, Nueweiba and Sharm El-Sheikh.
Khaled Ezzat, an owner of two gas stations in Cairo, helped organize Sunday’s protest at Misr Petroleum. “The amount of petroleum sources that come to Cairo are managed by the district general manager at Misr Petroleum,” he said. “He’s responsible for distribution in the city, but we know that he sends our portions to other governorates in the country, which is illegal,” Ezzat claimed.
Misr Petroleum is a publicly shared company responsible for the distribution of petroleum resources across Egypt. Ezzat held the company’s management responsible for the recent shortage. He also said that he knows smuggling has been an ongoing problem, accusing the company of being involved in “illegal” practices.
“When I’m watching Egyptian media and I see that the talk show hosts are putting the blame on gas station owners, saying that we are causing the shortage, we have to make things clear,” he said. “There is smuggling going on to Gaza from the way of Al-Arish, but the company is responsible,” he said. “Where do you think the people who smuggle get the actual product, it is all in the hands of the company.” Officials from Misr Petroleum were unavailable for comment.
Ezzat, along with the 30 other Cairo gas station owners, demanded that the company take responsibility for the shortage, he said, stressing that gas station owners are not stashing away gas in order to cause a crisis. “It is not the gas stations’ problem, we sell what we receive, we sell also according to the prices we get,” he added.
“Our commission is also unfairly priced, we receive from Misr Petroleum LE 18 for every 1,000 liter of 80-grade gas, 25 on 90 grade, and 35 on 92; this is unfair,” he said. “We have salaries to pay at our gas stations, as well as increasing electricity prices.” This morning, the group appointed seven people to meet and discuss their problems with the Cairo district general manager.
According to Ezzat, however, he was unwilling to sit down with them in order to come to a viable solution. Therefore, they went straight to the chairman of the company, who told them to give him 15 days to review their issues and find a solution. “If after those 15 days there is no solution to our problems we will go straight to the Ministry of Petroleum, file a case with the general prosecutor, and we will go on a complete strike,” he added.
As Egypt has been seeing a recent shortage in fuel, Major Mohamed Ismail, general director of investigation of supply, attributed the “crisis” to the smuggling of gasoline and diesel fuel through tunnels to Gaza. In a phone-in on Saturday to Mehwar TV’s “90 Minutes,” Ismail admitted that the crisis is also due to “lack of oversight and control in the market,” according to a report by Egynews.net.
Noran Ali, petroleum analyst at CI Capital, said that smuggling has been a known, ongoing issue; but to label it as the actual cause of the “crisis” is far-fetched. “The reason behind this shortage seems a bit fabricated and for political intentions,” said Ali. “It might have hidden political intentions because these are the same ways of the old regime, to occupy people with concerns for their basic necessities that are missing, fuel and food.”
“LPG or gas cylinders are sometimes smuggled to Gaza, but it was not that much of an issue to the point it would cause a crisis,” she pointed out. “This happened also during the days of Mubarak, before, and during the 18 days of the revolution and we never heard of this problem.” According to Ali, the country has been seeing an ongoing decline in oil reserves. “Generally, in Egypt we have a shortage in oil reserves, we always feed the shortage with imports so it never gets to the point where we have a crisis,” she said.
“Internationally, oil prices now are actually very low because the high demand is in winter especially for large consumers like Europe and America.” However, in order to overcome a real crisis in the future, Ali believes that Egypt should seek alternative resources right away. “Currently, we have no other solution but to shift to natural gas and to keep shifting to other alternative resources, other than oil,” she said. “Based on our reserves, there is no future for oil for Egypt.” Ali added that Egypt’s natural gas resources would also depend on the amount of gas exports the country allows. “It won’t just be looking at it from the business or economic side and whom we’re exporting to,” she said. “We’ll have to look at it for future generations, it is a question of: will we have enough to use locally and to export at the same time?”
Currently, Egypt exports gas to Jordan, Israel, and Syria via the Arish pipeline in Sinai. Jordan recently agreed to amend their gas deal with Egypt after prices were revised; Israel, however, continues to receive gas for under $4 dollars, the international standard price, under a 20-year deal since 2005.
In August, Egypt discovered a new gas source in its Western Sahara desert, which would produce about 12 million cubic feet of gas per day. Officials from the ministry of petroleum told Daily News Egypt the gas source would be ready for use in November.