Extreme gas lines crippled Cairo in the days leading up June 30th. Queues at gas stations reached several hundred meters, worsening Cairo’s already congested roadways. Drivers were forced to wait in lines for six to eight hours to refuel.
Government officials stated that the shortages were caused by excess consumption in anticipation of protests planned for June 30th. As the broader political events unfolded gas lines disappeared and shortages ceased. Some questioned how a problem severe enough to cripple the entire city could be resolved so rapidly amidst the political crisis. Egypt Oil and Gas explores the causality and speculation surrounding the fuel shortages that crippled Cairo in the days prior to June 30th.
The presence of hundreds of cars waiting to refuel clogged Cairo traffic in the days prior to June 30th, exacerbating tensions throughout the city. Yoursi Abd El Aziz Al Sakhawy, owner of a Caltex gas station in Maadi explained, “The supply car comes only once a day to fill in our storage and when we run out of gasoline, the customers just need to wait until the next day.” Adding, “people have to wait and by the time their turn comes, they have become angry.”
Opinions over the cause of the shortages varied. Some individuals speculated that panic was responsible for the lines and shortages. “June 30th is the cause of the crisis,” stated Ibrahim Abd El Al a student waiting in a Maadi gas line. “The deficit is artificial because it cannot happen so suddenly…this was fabricated ahead of June 30th,” El Al explained. Others argued that Morsi’s government had intentionally exaggerated shortages in an effort to “prevent people from getting to
demonstrations” as stated by engineer Mohamed Mokhtar after he endured a six hour wait for gas. Conversely, it was argued that government officials seeking Morsi’s removal had manipulated supplies to heighten anxiety and prompt political action.
Government officials rejected claims that fuel supplies were manipulated for political means. Former President Morsi stated the shortages were cause by media speculation and rumors surrounding impending supply cuts. Former Minister of Petroleum Sherif Hadara told state television on June 26th “what has been said about the shortage of oil, diesel, and other mineral materials is not true.” Hadara noted that the government was pumping “additional amounts of petrol and diesel to meet the higher than average demand.” EGPC Chairman Tarek el-Barkatawy acknowledged a “market shortage of petroleum materials” but asserted that a “20 to 30 percent” spike in consumption was responsible for the lengthy gas lines.
According to a report released by the office of former President Morsi, broader economic challenges contributed to shortages. The report cites, issues of liquidity, including delayed payments, and the absence of foreign currency greatly complicated daily operations. The black market also contributed substantially to shortages, as the government seized roughly 380 million liters of smuggled diesel and 52.1 million liters of smuggled petrol during the month prior. The report also cited distribution problems caused by domestic unrest, as supply routes were disrupted over security concerns. The report also attributed shortages to stifled domestic production as a result of obsolete wells.
As political events unfolded, fuel shortages and gas lines swiftly disappeared. After the ousting of President Morsi, on July 7th Magdy Wasfy, the General Director of Subsidy Affairs at the Supply and Internal Trade Ministry stated, that the gasoline crisis has been “90 percent resolved” reporting shortages in 20 out of 300 gas stations. The rapid disappearance of gas lines likely strengthened conspiracy theories on both sides. For those that believe Morsi’s administration created the shortages, the resolution of the shortages can be seen as proof that he was responsible. For the other side, who believe opposition forces orchestrated the shortages, the rapid improvement following the overthrow of Morsi may be seen as evidence that the opposition was behind the shortages and returned supplies to normal following the success of their plan.
Conspiracy or not, it is a fact that Egypt’s fuel supplies are undermined by the scarcity of foreign currency, obsolete refineries, smuggling and unsustainable subsidy system. While the government is in negotiations for oil importation, such measures will only provide short-term reprieve. Unless decisive measures are taken for curbing energy subsidies and for improving Egypt’s economy, public finances and rule of law in general, fuel deficits can paralyze the country again in the months to come.
By Salma Selim – Reporting by Wael Serhag