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Fuel production rise to combat shortages

Minister of Petroleum plans to increase fuel production in attempt to meet demand and address nationwide electricity crisis

Former petroleum minister Osama Kamal admitted that power plants “need nearly 127.4m cubic metres” of natural gas daily (DNE Photo)
Former petroleum minister Osama Kamal admitted that power plants “need nearly 127.4m cubic metres” of natural gas daily
(DNE Photo)

Egypt’s Ministry of Petroleum and Mineral Resources has announced its plans to boost its production capacity of petroleum to a million barrel per day, as the country faces energy shortages leading to recurring blackouts that have fueled dissent among the public.

The ministry is also planning to increase its production of natural gas by 7.5m cubic metres, Petroleum Minister Sherif Haddara said in a press conference last Thursday. This will push the country’s production of natural gas to 84mn cubic metres per day starting in June.

According to a statement published on the official Facebook page of the Egyptian Cabinet on Wednesday, the government will also raise the provision of mazut fuel oil to 22,000 tonnes per day, up from 17,000. The government earmarked $200m dollars to provide the necessary petroleum products, and an additional $525mn will be approved at a later date to provide Egypt’s power units with their energy needs, the statement said.

These decisions were made to offset a growing demand for electricity which prompted the government to resort to power cuts in hopes this would curtail the pressure on power generators.

“We are working to increase fuel products to meet demands of the local market,” Haddara said. “There’s cooperation between the Ministry of Electricity and Ministry of Petroleum to solve the problem of power outages” he added.

Waves of blackouts have been emblematic of heated summers in Egypt, and have been the core of public outcry last year as different governorates across the country were hit by the crisis.

Earlier this year, former petroleum minister Osama Kamal stated that “there’s a 25% fuel insufficiency toward power plants in the country.”

Kamal admitted that power plants consume around 90.6m cubic metres of natural gas on a daily basis, when “they actually need nearly 127.4m cubic metres”.

Economy expert Sherif El-Khereiby said that “continuous power outages will not solve the fuel crisis”.

“I doubt that the government has the financial capability to increase its production by this much to solve the fuel or electricity crisis; it’s ridiculous” he said.

El-Khereiby added that with the current foreign currency standings and depreciating value of the Egyptian pound, such a decision is “impossible to be implemented”.

Egypt has around 220 electricity generators nationwide, which consume roughly 100 million cubic metres of fuel on a daily basis.

Besides the continuous blackouts, fuel shortages have become a daily hassle for cab drivers and industrial and agricultural sectors after the government decided to increase fuel prices by 50%.

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