Egypt to boost fuel supply to ease power shortages

The Egyptian government said on Wednesday it would supply more gas and diesel to power stations to deal with electricity shortages that have worsened in recent months after the cash-strapped country failed to import enough fuel.

The government has set aside $200 million to finance the additional petroleum products and is in the process of approving an additional $525m, the cabinet said in a statement.

Facing a budget and currency crisis, Egypt has been struggling to pay for food and fuel imports. Last month it received $5 billion in financial support from Qatar and Libya. Qatar also agreed to supply gas to Egypt as needed.

The government decided to increase the amount of gas for electricity generation by 9.1 percent to 84m cubic meters a day from June 1. It also plans to increase the supply of diesel by 29 percent to 22,000 tons a day.

The strain on the power grid will increase in the next few months as temperatures rise and air conditioning units are turned on across the country of 82m people.

In March, the petroleum ministry blamed power cuts on the state-run electricity sector’s inability to secure funds for imported fuels. But fears of severe summer power shortages have eased in recent weeks because of the Qatari and Libyan support.

“It won’t be the serious shortages that people were anticipating a few months ago before they got a $5bn influx of foreign exchange,” a senior U.S. diplomat said.

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