Egypt will introduce a smart card system for subsidised fuel in July and August on a trial basis, Oil Minister Sherif Haddara said at a press conference on Thursday.

Using smart cards, consumers will be able to buy a limited amount of subsidised fuel, beyond which they will have to pay market prices. The system is aimed at reducing Egypt's energy subsidy bill by over LE30 billion ($4.28 billion).

Haddara said the system would reduce the amount of subsidised fuel that is smuggled or sold on the black market, which is currently estimated to be at least 20 percent.

The total bill for energy subsidies is expected to reach LE100 billion in 2013/14, compared to some LE120 billion expected this year.