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More diesel shortages, official predicts

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More diesel shortages, official predicts

Diesel shortages may grow more severe in March as import allocations fall short, an official source at the Egyptian General Petroleum Corporation has said.

The senior official, quoted by Turkish news agency Anadolu, said Monday that the Finance Ministry had allocated US$300 million in March to diesel imports, though the EGPC requested $500 million.

The official claimed that Egypt's decision to cut down dollar allocations for fuel subsidies is the result of insufficient international reserves, which dropped to $13.6 billion by the end of June, adding that this is sufficient to secure diesel imports for only 75 days.

“We are experiencing a real crisis. Demand from farmers is rising significantly this month, because it is the harvesting season,” the official warned.

The same official explained that diesel import allocations normally stand at $400 million in low-demand months, increasing to $500 million between April and June.

The EGPC pumps 10 percent more fuel at the beginning of March every year, raising the amounts provided up to 38,000 tons per day, compared to 35,000 during other times, the official said.

Diesel fuel subsidies account for nearly 47 percent of the energy subsidization budget for 2012/13 and will likely stand at LE55 billion, out of a project total of LE120 billion in petroleum product subsidies.

Edited translation from Al-Masry Al-Youm website

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