Egyptian authorities will distribute in October smart cards as part of its new system for rationing government-subsidised fuel, Finance Minister Fayad Abdel-Moneim told the state-run Al-Ahram Arabic website Sunday.
Under the new system, consumers will be provided with limited amounts of subsidised fuel, beyond which they will have to pay at market prices.
Egypt, which spent LE120 billion in fuel subsidies this fiscal year, according to former Petroleum Minister Osama Kamal, is obliged to implement drastic cuts to rein in a galloping budget deficit and secure a $4.8 billion International Monetary Fund loan.
Kamal, who spoke to Ahram Online last month, expected the smart card system to save some LE30 billion out of Egypt's fuel subsidy bill, which the government expects to reach LE99.6 billion, in the coming 2013/14 fiscal year — some 15 percent of total forecast public expenditures.
Under the new system, vehicles with smaller engines (1,600cc or smaller) will be assigned an annual 1,800 litres of petrol at the subsidised price. If consumption exceeds this amount, motorists will have to buy petrol at market prices, according to statements made by then-Planning Minister Ashraf El-Araby to the state owned MENA news agency in March.
Cars with larger engine sizes will not be eligible for subsidies, said El-Araby. Final market prices for petrol have not been announced yet; nor have the prices at which petrol will be sold to commercial vehicles.