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Egypt to issue smart cards to fuel stations in subsidy-cutting move

Drivers will need smart cards to buy fuel, but quotas will not be set on quantities in project's first phase, Egypt government says

Reuters, Friday 4 Oct 2013
petrol station
Vehicles queue at a petrol station (Photo: Reuters)
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Egypt is preparing to print 5 million smart cards as part of a program to reduce costly energy subsidies and will distribute them over the next three months, finance minister Ahmed Galal said on Thursday.

Motorists will eventually use the cards to buy gasoline and diesel at fuel stations in a program begun by the administration of ousted president Mohamed Morsi in July.

The government says drivers will need the cards to buy fuel but that it will not set quotas on quantities in the early phases and will be content merely to track and monitor deliveries.

It says the program is designed to prevent leakages onto the black market and to smugglers. Later on it aims to tighten up the system but has declined to give details.

Trial runs will start at fuel stations to make sure the system runs efficiently, Galal said in an emailed statement. The government has already distributed smart cards to fuel depots and delivery tankers.

Egypt sells many energy products at prices substantially below the cost of production. Successive governments have struggled to cut the cost of energy subsidies, which make up 20 percent of all state expenditure, without angering citizens.

Galal said the government had also added fuel oil to the cards and might eventually include a range of other products.

Gulf Arab oil-producing countries promised Egypt $12 billion in aid, including deliveries of petroleum products, after Morsi's overthrow, which followed weeks of mass protests against his Islamist rule.

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