As petrol prices rise, more Egyptians convert to duel-fuel vehicles

Taxis and cars are filled up with gas at Natural Gas Vehicles petrol station in Cairo, Egypt on November 27, 2019. (Reuters)
Updated 09 December 2019

As petrol prices rise, more Egyptians convert to duel-fuel vehicles

  • Fuel prices have been increasing since 2014
  • Officials say the number of private cars converting is rising

CAIRO: The number of Egyptians switching to duel-fuel vehicles is accelerating as the government pushes motorists to use cheaper, cleaner and plentiful natural gas.
About 300,000 vehicles, mostly taxis and minibuses, have been converted to duel-fuel systems since the 1990s — a small fraction of the 11 million vehicles licensed in the country.
But authorities are encouraging more drivers to switch by subsidising vehicle conversions, keeping compressed natural gas (CNG) prices low, and building CNG fueling stations and conversion plants.
Nearly 32,000 vehicles were converted during the financial year from July 2018 to June 2019, two petroleum ministry officials said. The target for this financial year is 50,000 vehicles. That compares with just 6,000 conversions in 2015/16.
Officials say the number of private cars converting is rising. They hope this will soften the blow of petrol price hikes after recent subsidy removals, as well as reducing pollution and cutting the import bill for liquid fuels.
Egyptians have seen steep increases to fuel prices since 2014, with most energy prices brought up to international levels under a three-year, IMF-backed reform plan completed this year.
But gas has remained cheap compared with liquid fuels.
One cubic meter of CNG costs 3.5 Egyptian pounds, roughly the equivalent of one liter of diesel at 6.75 pounds or one liter of 80-octane petrol at 6.5 pounds.
“The ministry of petroleum has maintained an appropriate price so that natural gas always stays at 50% of the 80-octane petrol (price), which encouraged drivers to turn to conversion,” said Abdelfattah Moustafa Farahat, head of Egyptian International Gas Technology GASTEC.
Private cars now make up 30% of conversions, Farahat said.
Officials say a boom in natural gas production and exploration since the discovery of the giant offshore Zohr gas field in 2015 spurred them to act. Egypt became self-sufficient in natural gas in late 2018.
“The discovery of Zohr field and achieving self-sufficiency in natural gas have encouraged the state to think: why don’t we use this gas as a domestic fuel and work to expand its use,” said ‭‭‭‭Ayman Shalaby, assistant vice chairman at the Egyptian Natural Gas Holding Company (EGAS).
GASTEC is one of two state-run companies, along with the Natural Gas Vehicles Company (Car Gas), that dominate the sector. Private and foreign companies have also entered the market the past few years.
GASTEC plans to set up 54 new duel-fuel stations with CNG over the next three years, in partnership with Italy’s Eni , as well as building more fueling stations for public buses, Farahat said. Currently, Egypt has 187 CNG fueling stations and 72 conversion centers.
The government also has a plan for minibuses, a common form of cheap transport across Egypt. Under the scheme, 142,000 minibuses would be converted and another 88,000 old diesel minibuses replaced with biofuel equivalents over the next three years, while more than 350 fueling stations would be built.
Motorists gave the duel-fuel system mixed reviews. Some praised cost savings on fuel, but complained of reduced power or luggage space.
Officials say conversions are preceded by technical checks and the cylinder size and shape can be adapted to the vehicle.
The government is subsidising and providing low-interest instalment plans for conversion systems, which cost 5,000-7,500 pounds ($310-$465), as well as encouraging assembly plants and importers to provide vehicles with built-in systems.


Huawei: Smartphone chips running out under US sanctions

Updated 15 min 30 sec ago

Huawei: Smartphone chips running out under US sanctions

  • Huawei is at the center of US-Chinese tension over technology and security
  • Washington cut off Huawei’s access to US components and technology last year

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.
Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.
Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably will be lower than 2019’s level of 240 million handsets but gave no details. The company didn’t immediately respond to questions Saturday.
Huawei, founded in 1987 by a former military engineer, denies accusations it might facilitate Chinese spying. Chinese officials accuse Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric cars, renewable energy and other fields in which the ruling Communist Party hopes China can become a global leader.
Huawei has 180,000 employees and one of the world’s biggest research and development budgets at more than $15 billion a year. But, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced its global sales rose 13.1 percent over a year ago to $65 billion in the first half of 2020. Yu said that was due to strong sales of high-end products but gave no details.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung for the first time due to strong demand in China, according to Canalys. Sales abroad fell 27 percent from a year earlier.
Washington also is lobbying European and other allies to exclude Huawei from planned next-generation networks as a security risk.
In other US-Chinese clashes, TikTok’s owner, ByteDance, is under White House pressure to sell the video app. That is due to fears its access to personal information about millions of American users might be a security risk.
On Thursday, President Donald Trump announced a ban on unspecified transactions with TikTok and the Chinese owner of WeChat, a popular messaging service.