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Africa North
Diesel shortage pushes Egyptians to the brink
2013-02-17
Via the Instapundit. A few days old but worth noting.
CAIRO - Fathy Ali is beyond anger as he queues for hours in a line of 64 trucks and buses to fill his tank with scarce subsidized diesel fuel, known in Egypt as "Solar."

"This has become part of my life. I come and wait for hours or days, depending on my luck," the chain-smoking bus driver said at a besieged gas station on Cairo's Suez High Road, wrapped in a scarf and thick coat for the long ordeal. "At the start it used to upset me a lot but now I've kind of given up."

Diesel supplies are drying up as a cash-strapped government struggles to cap a mounting bill for subsidies it has promised the IMF it will reform to secure an elusive $4.8 billion loan desperately needed to keep a sagging economy afloat.

The situation appears near breakdown with growing shortages, unsustainable subsidies and foreign exchange reserves running out, raising the risk that fuel bottlenecks lead to food shortages and pose a risk to political stability.

Foreign reserves are down below $15 billion, less than three months' imports, despite deposits from Qatar and Turkey. The Egyptian pound has lost 8 percent of its value this year and a black market has emerged for hard currency.

The nation's strategic reserve of diesel fuel is down to three days' supply, the official MENA news agency quoted a government official as saying last week. Bakeries that use diesel to make staple subsidized bread have been told to keep 10 days' fuel supply but not all have the capacity.

The Muslim Brotherhood-led government of President Mohamed Mursi this week postponed for up to three months a rationing system for subsidized fuel due to start in April in what looks like an attempt to avoid upsetting voters before parliamentary elections due that month.

But reforms cannot be delayed for long, economists say.

"Fuel shortages are a symptom of the strains on Egypt's unsustainable subsidy system," said Simon Kitchen, an economist at EFG-Hermes in Cairo.

Two government measures have aggravated the problem. In December, the subsidy on 95-octane petrol used by the wealthiest Egyptians was scrapped. That drove some motorists down-market to buy lower-grade fuel, raising the demand for subsidized 92-octane gasoline.
Super octane in the U.S. is 93 octane, though a gas station near us sells 115 octane (at $6.89 a gallon) for reasons that I can't fathom...
Then in a drive to curb theft, smuggling and other abuses, the government restricted distribution of heavily subsidized low-grade gas oil used by trucks, tractors and buses to filling stations owned and operated by the military. That caused longer lines at the pumps and increasing economic disruption. At several filling stations, queues led to fights breaking out this week, Egyptian media reported.

The situation is so serious that Mursi held an emergency meeting with ministers about it on Tuesday night and instructed the energy minister to ensure sufficient supply, according to presidential spokesman Yasser Ali.
Ah yes, instructions. That should do it. Kimmie did that in North Korea all the time. He'd visit a place and provide personal instruction. That's why Nork-land is a paradise, you know...
Minister for Petroleum and Mineral Resources Osama Kamal said subsidizing Solar, sold at a give-away price of 1.25 Egyptian pounds ($0.19) a liter, costs the government $35 million a day. Altogether, energy subsidies will cost 120 billion Egyptian pounds in the fiscal year to end-June, up from 115 billion pounds the previous year, he said. They account for almost all of the forecast 135 billion pound budget deficit.

Until Tuesday evening, when the diesel shortage became the number one topic of television and radio talk-shows, the government seemed to be in denial.

"There is no shortage," Kamal said. "There is a crisis in the distribution of Solar, not in the availability of it."

Asked whether a shortage of hard currency was constraining fuel imports, he said: "Financial resources are still available for imports but they must be reserved for the most important priorities."

To drivers and tour operators, the result is the same.

Khaled el-Manawi, a senior board member of the Egyptian travel agents' association, said the government was harming his industry, already hard hit by political turmoil, by withdrawing subsidized fuel from tourist boats.

Businessman George Bishoy, who owns a fashion accessories store in the affluent Cairo suburb of Heliopolis, said his business had suffered a lot from delays in the delivery of imported goods.

The daily al-Ahram quoted drivers complaining about the emergence of a black market in which a liter of diesel is sold at double the normal price.

The spokesman of the independent drivers' union, Tarek el-Bahary, told Reuters: "The Solar problem is devastating. Drivers are suffering daily and the elected president has failed to solve this crisis."

"The number of trucks has not increased, the number of trips has not increased but the government is unable to provide the Solar and unable to come up with creative solutions to solve the problem," he said.
Posted by:Steve White

#32  "Unfortunately, the cronyism was pretty obvious"

You mean Bambi = Mubarak?
Posted by: Barbara   2013-02-17 21:08  

#31   "...Egypt was a corrupt socialist state during Mubarak's reign..." - Zhang Fei

Actually, they were moving away from socialism with some govt industries sold and others transferred to various private consortia. Unfortunately, the cronyism was pretty obvious and friends of Mubarek ended up with stuff at very favorable terms and other friends of Mubarek ended up with sweet commissions for their role in the transaction. This gave capitalism (or liberalism) a bad name.
Posted by: lord garth   2013-02-17 21:04  

#30  Instructions: "I'm here to put you back on schedule."

Good luck with that.
Posted by: KBK   2013-02-17 21:02  

#29  Tipover, While it was many years ago, i think the reson Tom's motor seized was because he did mess with the timing and it ran hot. he had been using smaller amounts of this AVGAS for some time. it was during the 70's oil embargo and the gas was from the daily fuel samples out of our station S-2's and T-28's. wonder if the high lead content helped?
Posted by: USN,Ret.   2013-02-17 18:14  

#28  Slightly off topic: I don't know what happened to USN,Ret's neighbor but since higher octane burns slower (resists detonation) than the regular gas you need to address timing and jetting when using 115 octane race gas. Gives a longer duration thrust for a given power cycle and lets the engine run cooler if the engine is properly set up. Cooling was why high performance (especially air-cooled) aircraft engines were designed for up to 130 octane fuels.

Want to grenade an engine? Use gasohol in an engine not designed for it and/or in an infrequently used motorcycle or classic car. Cuts oil films, gathers moisture in heads, bores, bearings (promotes rust), rots fuel lines and pump diaphragms not designed for alcohol.
Posted by: tipover   2013-02-17 17:44  

#27  Egypt was a corrupt socialist state during Mubarak's reign. Morsi campaigned on promises of more socialism

"Corrupt, socialist and Islamic is no way to go through life, son."
Posted by: Pappy   2013-02-17 17:43  

#26  Diesel shortage pushes them to the brink? Schlocky bad movie trailers also pushes them to the brink.
Posted by: JohnQC   2013-02-17 16:44  

#25  Egypt was a corrupt socialist state during Mubarak's reign. Morsi campaigned on promises of more socialism. Is it any surprise that Egypt's finances are worse than they have ever been?
Posted by: Zhang Fei   2013-02-17 15:45  

#24  Eq=gyot is in economic denile...
Posted by: Bright Pebbles   2013-02-17 15:17  

#23  I'll have Bacardi 151 and Clammato.
Posted by: Shipman   2013-02-17 15:10  

#22  drink up!
Posted by: Frank G   2013-02-17 14:43  

#21  Why thank you Bobby. That was from the dim mists of the past, about 45 yrs. ago to be precise. 8^(
Posted by: Alanc   2013-02-17 14:41  

#20  Once upon a time, a co-worker dumped about 5 gallons of 115/145 AVGAS into his F150 tank ( said there was aleady 15 gallons of pump gas in it) about 2 days later he had the nicest small block paperweight in the neighborhood. Ford Blue and everything......
i limit my hi octane in my motorsporting to the 93 ; works just fine.
Posted by: USN,Ret.   2013-02-17 14:31  

#19  You got me curious, Alanc - For example, petrol with the same knocking characteristics as a mixture of 90% iso-octane and 10% heptane would have an octane rating of 90.[2] A rating of 90 does not mean that the petrol contains just iso-octane and heptane in these proportions, but that it has the same detonation resistance properties. Because some fuels are more knock-resistant than iso-octane, the definition has been extended to allow for octane numbers higher than 100.

So it no longer means what you were taught!
Posted by: Bobby   2013-02-17 12:44  

#18  But reforms cannot be delayed for long, economists say. "Fuel shortages are a symptom of the strains on Egypt's unsustainable subsidy system," said Simon Kitchen, an economist at EFG-Hermes in Cairo.

Geithner and Bernanke would surely disagree.
Posted by: Besoeker   2013-02-17 12:07  

#17  The one thing I thought I remembered from my long, long ago Organic Chem class was that Octane was the percent of a certain type of Carbon ring and therefore it couldn't ever be higher than 100. The prof claimed that anything higher was marketing hype. This was back in the days of "Keotane" rating from, I think, Sunoco.

Am I having weird flashbacks......again? 8^(
Posted by: Alanc   2013-02-17 11:37  

#16  Engines may not last as long, but they'll sure get there quicker.

Speaks for nitro-methane too.
Posted by: Glenmore   2013-02-17 11:34  

#15  …raising the risk that fuel bottlenecks lead to food shortages and pose a risk to political stability.

Yikes! At this critical juncture can you just imagine if Egypt was to lose its...political stability?
Posted by: DepotGuy   2013-02-17 11:34  

#14  Mullah Richard: aha. Hadn't thought of that. I thought those devices used plain old regular just like my snowblower.
Posted by: Steve White   2013-02-17 11:31  

#13  Any snowmobile, ice racers or motocross enthusiasts around you there Dr. White?

115 Octane is the fuel of champions (or folks who think they are).

Engines may not last as long, but they'll sure get there quicker.
Posted by: Mullah Richard   2013-02-17 11:14  

#12  Redistribution at it's finest.

the government seemed to be in denial.

"There is no shortage," Kamal said. "There is a crisis in the distribution of Solar, not in the availability of it."
Posted by: Bobby   2013-02-17 11:08  

#11  used only camels and wagons, like Mohammed did

I was going to say "feet" but they have a propensity for shooting themselves there.
Posted by: Pappy   2013-02-17 10:17  

#10  Frank - exactly. If they swore off cars and trucks, and used only camels and wagons, like Mohammed did, there would be no fuel shortage.
Posted by: Rambler in Virginia   2013-02-17 10:09  

#9  I know what would fix this: more Islam
Posted by: Frank G   2013-02-17 10:04  

#8  Hosni: "miss me now?"
Posted by: Frank G   2013-02-17 09:58  

#7  Is this the same "brink" I've been hearing about for cash and food or is this a new "brink"?

It's so hard to keep up.
Posted by: Alanc   2013-02-17 08:37  

#6  The nation's strategic reserve of diesel fuel is down to three days' supply,

Wake me in three days. I wan to watch the fireworks.
Posted by: Redneck Jim   2013-02-17 08:17  

#5  Mmmm, Mmmm, Mmmm.
Posted by: Secret Asian Man   2013-02-17 05:38  

#4  Muhammad meet Malthus.
Posted by: g(r)omgoru   2013-02-17 05:08  

#3  Seriously tho, 115 is aviation +.
Posted by: Shipman   2013-02-17 02:05  

#2  Super octane in the U.S. is 93 octane, though a gas station near us sells 115 octane (at $6.89 a gallon) for reasons that I can't fathom...

Why now, if you mill off say a half inch (more or less) from yur heads thar, and run your compression up to 22 tah 1, then you likely wanting that 115.
I won't vouch for the timing tho.
Posted by: Shipman   2013-02-17 02:05  

#1  No matter what you encourage Morsi to do, he re-invents islamic wheels and the Judiciary. Business was business. Now it collapses.

The Country of Egypt has been collapsed since he took charge. The economics continue to degrade. It sounds familiar to many other Nations.

ohh :(
Posted by: newc   2013-02-17 00:13  

00:00