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Africa North | |||||
Petrol shortages trigger tension in Egypt | |||||
2012-01-18 | |||||
The oil ministry said on Monday authorities were pumping 21.5 million litres of petrol daily, with nine million litres allocated for the Cairo governorate alone, denying any plans to raise the cost of petrol, which is subsidized. But these assurances failed to calm motorists. Authorities are blaming speculators and smugglers for the crisis. "What we are witnessing is an artificial crisis caused by rumours by some people who have an interest in making profit," said Planning and International Cooperation Minister Fayza Abul Naga. Newspapers have linked the crisis to smugglers who reportedly buy up the subsidised petrol to sell abroad at higher prices. Petrol in Egypt is sold at almost half the market value.
"The majority of Egypt's gasoline needs are produced by local refineries. Imports are estimated at not more than 10 percent, and all gasoline production units are working at full capacity," he told reporters. On Monday Egyptian Prime Minister Kamal al-Ganzuri held talks with a delegation from the International Monetary Fund on the possibility of obtaining a 3.2 billion dollar (2.5 billion euros) loan to revive the economy. "We discussed obtaining a loan from the IMF worth 3.2 billion dollars to help the government implement its programme to cut the budget deficit and the balance of payments," Abul Naga told reporters after the meeting. Abul Naga insisted that the IMF has not imposed any conditions on Egypt in exchange for providing it with financial aid, including urging Cairo to raise the price of fuel. Scrapping petrol subsidies could ease Egypt's budget deficit which the government says stands at 144 billion Egyptian pounds (around 24 billion dollars). But financial analysts believe that the deficit for the current fiscal year -- from July 1 to end of June -- will be much larger. The large fiscal deficit, a fall in receipts from the vital tourism industry and an investment climate badly affected by instability and violence all contributed to the slump.
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Posted by:Steve White |
#7 "...the subsidies distort the market, creating shortages..." And every country is doing the same kind of thing. As Reagan said, If it moves, tax it. When it stops moving, subsidize it. |
Posted by: newc 2012-01-18 23:47 |
#6 We will bail out the EuroPeons, bet on it. It is integral to maintaining the con for a little while longer. Image is everything when it comes to fiat currency. |
Posted by: bigjim-CA 2012-01-18 23:08 |
#5 This is what happens when a country runs low on money. |
Posted by: Anguper Hupomosing9418 2012-01-18 21:12 |
#4 Hey, we can show them how to make fuel from grain. Oh wait...... |
Posted by: manversgwtw 2012-01-18 19:15 |
#3 Uncle Sugar always comes through. We're getting ready to bail out the Euros. Don't think so? You wait and see. |
Posted by: Steve White 2012-01-18 15:58 |
#2 They're gonna ask Uncle Sugar to subsidize their oil? LOL. On second thought, Uncle Sugar will borrow the money from China and do it. whimper |
Posted by: Ebbang Uluque6305 2012-01-18 15:45 |
#1 Clearly, there aren't enough brains in Egypt. |
Posted by: Skidmark 2012-01-18 14:15 |