Al-Ahram Weekly Online   11 - 17 October 2012
Issue No. 1118
Published in Cairo by AL-AHRAM established in 1875

Queuing continues

The government has barely scratched the surface in its attempt to resolve bread and fuel shortages, reports Niveen Wahish

Anyone dreaming that queues for diesel and subsidised bread would disappear within 100 days of Egypt's first democratically elected president coming to power must have woken up by now. The queues are still there. While there has not been a shortage in gasoline used in passenger cars, namely octane 80, 90, 92 and 95, in the past 100 days, the shortage of diesel used by trucks and public transportation has continued. As for the bread, Umm Mohamed, 60, says the quality of the bread is slightly better, but acquiring it remains a daily battle.

Farag Wahba, head of the bakeries division at the Cairo Chamber of Commerce, explained that the reopening of some bakeries, which had been closed, eased the pressure. The bakeries had been shut down by Ministry of Supply inspectors for infractions. Wahba added that the minister of supply announced that in case of infractions, the bakery will not be closed down.

Wahba told Al-Ahram Weekly that noticeable improvement could happen if bakeries no longer receive subsidised flour but instead buy it at market prices. That step will prevent the smuggling of subsidised flour to be sold at a higher price on the market. According to this plan, the government will subsidise bread at the final stage. It will pay bakeries the market price, but it will sell it at LE0.05.

The steps suggested by President Mohamed Morsi to resolve the bread problem in 100 days include monitoring the weight and quality of the bread produced, separate production from distribution, give incentives to encourage the production of higher quality bread, and increase penalties for those who do not adhere to weight and quality standards.

According to the website Morsimeter, which measures the performance of Morsi relative to his 100-day promises, as far as bread is concerned, three out of 13 have been achieved, but work is in progress on seven out of 10 issues. Among the achievements according to statements sent by the presidency to Morsimeter were the increase in the productivity and nutritional value of bread through the addition of new production lines, modernising machinery and increasing the quantities of flour distributed to bakeries. The statements also pointed out that work has been done subsidising the large collective bakeries to make them the ultimate resort in times of crises.

Much less progress has been achieved on fuel. Hossam Arafat, head of the general division of petroleum products at the Federation of Chambers of Commerce, said no improvement whatsoever has taken place and the shortage in diesel continues.

Morsimeter shows that one out of five points only has been achieved, which is the implementation of strict penalties on smugglers. It said that work is in progress on the home delivery of butane gas cylinders in cooperation with NGOs.

But Arafat said that dealing with smuggling is only one in a series of steps that need to be undertaken. The solution to the problem, according to Arafat, lies in coordination between all concerned parties -- namely the ministries of finance, petroleum, supply, interior as well as the municipalities.

"That did not happen and all of them are to blame for failing." He said the goals that have been set are shallow and lack the mechanisms and procedures to implement them. Arafat criticised the government idea of delivering butane gas cylinders to homes saying that delivering the cylinders will not solve the core of the problem. "Even that solution did not involve the Petroleum Ministry, which is a main party to the problem," he said.

Arafat believes that 100 days could have been enough to bring about change had specific procedures been followed. He said it all comes down to demand and supply; there are seasons in which demand peaks, and if there is not proper planning, a crisis happens.

Arafat attributed the easing of the problem of butane gas cylinders to the fact that Ramadan, where demand for gas cylinders peaks, came to an end. Another season when demand peaks is winter, when cylinders are needed not only for cooking but for heating as well.

A coupon system whereby each family is allocated a certain number of cylinders is seen as a possible solution to the problem. But Arafat believes that that system, along with other plans to rationalise subsidies, may not see the light soon. In fact, although President Morsi in his 6 October speech pointed out the importance of restructuring subsidies, he did not mention how that will be done.

"It needs political will and with parliamentary elections coming up, nothing of the sort will happen," Arafat said.

Morsi had promised to make all kinds of fuel available nationwide in 100 days, by collaborating with NGOs to make butane canisters available in every household, assigning inspectors to accompany the transfer of fuel from the depot to stations to eliminate black market sales, and increasing penalties for fuel smugglers.

Economist Omnia Helmy, acting executive director of the Egyptian Centre for Economic Studies, said the targets might have been ambitious for a three-month period. However, she believes solutions are possible, if there is will and a clear plan of action. To her, piecemeal solutions will not work. "What is needed is a comprehensive policy accompanied by clear, transparent communication," she said.

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