The petroleum minister met with the electricity minister Sunday to discuss alternatives for operating power plants with the available fuel. Petroleum Minister Osama Kamal had previously threatened to cut off fuel from the Electricity Ministry if it does not pay its LE50 billion in debt to the Petroleum Ministry.
The country has experienced an energy crisis for nearly two years, because the petroleum sector is not profiting from the sale of its petroleum products, of which it imports nearly 60 percent.
Petroleum products are sold on the domestic market at less than their cost, while global prices are increasing, causing an annual increase in energy subsidies, especially as a result of the differences in cost and sale prices.
The sector also suffers from fuel being smuggled from warehouses and gas stations to be sold on the black market, which decreases the amount of fuel available.
The fuel shortage leads to the weak performance of power plants, which produce 90 percent of Egypts electricity needs — especially because they depend mainly on natural gas, fuel oil and diesel to improve the quality of power generated.
Kamal had told privately owned daily newspaper Al-Watan last week that the Electricity Ministry gets LE1.2 billion worth of fuel from the petroleum sector each month, but only pays LE200 million. The rest of the money is left for the Petroleum Ministry to come up with to meet citizens needs and prevent power cuts, especially in the summer, during which energy consumption is higher because people use cooling appliances.