1. (SBU) SUMMARY. Diesel fuel remains an extremely scarce
commodity in Eritrea. UN agencies and the International
Committee of the Red Cross (ICRC) have not received their
diesel allocations from the Eritrean government since April


10. Many of the Eritrean government's civilian vehicles are
not being used, and diesel fuel for public use remains nearly
non-existent. END SUMMARY.



2. (SBU) NO DIESEL FOR INTERNATIONAL ORGANIZATIONS


--------------------------



--------------------------



UNDP Representative and senior UN official in Eritrea Macleod
Nyirango (protect) informed Emboffs the Government of the
State of Eritrea (GSE) has completely cut all UN agencies'
diesel fuel allocations. Each UN agency and international
organization is assigned a specific commercial gas station
for diesel fuel, with each refueling deducted in a ledger
from its remaining allocation. On April 10, the GSE informed
commercial gas stations to stop providing diesel to nearly
all international organizations, including all UN agencies
and ICRC, until further notice. After repeated requests for
a meeting, Macleod raised the issue with the Head of the
Office of the President Yemane Ghebremesekel on April 17.
Yemane advised him to "be patient," and that the situation
will be resolved. Macleod noted to Conoff that he has been
using his official car, his only gasoline-powered vehicle,
for all UNDP business.

ICRC Representative Mulan Giovannini (protect) informed
Conoff on May 12 that ICRC received only a portion of its
allocation on April 10 and will not receive more until
further notice. ICRC normally uses approximately 7,000 liters
per month. Giovannini anticipates the government will give
fuel for special projects of high value to the GSE, such as a
repatriation of Ethiopians scheduled for June, but declined
to comment on how long the ICRC office will remain open
without diesel fuel.

Foreign Embassies continue receiving diesel fuel without
interruption. For example, the U.S. Embassy recently topped
off its fuel tanks with 8,000 liters, and the European
Commission (EC) continues receiving fuel at its designated
filling station.



3. (SBU) GSE AND PRIVATE SECTOR SHORTAGES


--------------------------



A 2008 IMF report shows Eritrea's diesel fuel purchases fell
drastically from 121,828 metric tons in 2003 to 69,700 in
2007, a fact evident to long-time residents in Eritrea.
Emboffs received reports that nearly the entire vehicle fleet
of some zoba (regional) administrations are immobile from
lack of fuel. Macleod Nyirango told Emboffs the Debub
administration grounded 39 of its 40 vehicles for lack of
fuel. In Asmara, the municipal bus service receives only 40%
of its pre-shortage diesel. A private Eritrean bus service
owner informed Conoff that his diesel supplies were cut by
90%, reducing his number of passengers per day from 75,000 to
12,000. Diesel for personal vehicles is not available
officially, but gasoline remains curiously plentiful.

Egypt Air, which refuels its twice weekly Cairo-Asmara-Cairo
flight in Asmara, was informed on May 9 the jet fuel normally
purchased for the return flight to Cairo is not available
until further notice. Egypt Air's local chief informed
Emboffs that flying round trip without refueling allows the
airline to fly only 60 passengers each direction, which could
impact the profitability of the route.

Electricity availability in Asmara remained stable until May
11 and 12, when Emboffs noticed many hours of electricity
outages in several parts of Asmara. Conoff reported his
generator ran continuously for 18 hours, and several other
Emboffs noted several long outages. Post is monitoring
whether this is merely an anomaly or a further indication of
the GSE's fuel woes.



4. (C) Comment: The GSE's inability to provide fuel to

ASMARA 00000258 002 OF 002


hard-currency paying customers is either economic
incompetence or simply another method to control foreign
organizations. It is understandable that increased fuel
costs and reduced government revenues require the GSE to
reduce domestic fuel consumption. Since foreigners pay in
hard currency, however, and because the GSE controls the
entire distribution chain, one wonders how the GSE's economic
czars cannot recognize the profit opportunity offered by
selling diesel to foreign organizations at an increased
price. Given the GSE's Marxist ideology and its desire to
control all aspects of society, it's more likely the
government's current diesel policy is some combination of
both incompetence and desire for control. End Comment.
MCMULLEN