People jostle for a fuel dispenser nozzle as a worker fills the tank of a car at a petrol station in Cairo (Photo: Reuters)
Egypt is to implement a long-planned smart card system for fuel at gas stations starting on 15 June, Planning Minister Ashraf El-Araby said on Monday.
The measure, postponed several times since 2013, is part of a long-term plan to cut state fuel subsidies, which have accounted for some 13 percent of government spending in this year's budget.
"The first phase aims at setting up the system, curbing corruption and smuggling, and building a strong database for the government and decision-makers," El-Araby told Ahram Online on the sidelines on a workshop on a new civil service law.
The new smart cards will allow the government to monitor consumption patterns to determine future rationing, he said.
Last year, the government raised fuel prices by up to 78 percent to reduce subsidies by up to LE 44 billion, as the cabinet sought to reduce its budget deficit to 10 percent of the GDP, down from 12.8 percent in the previous year.
Although the government has not since announced any more subsidy cuts, Finance Minister Hany Qadry told reporters last week that he estimated a drop in the fuel subsidy bill by at least 10 percent in 2015/2016, compared to the current budget.
A dramatic fall in worldwide oil prices is expected to cut Egypt's projected fuel subsidy bill by at least 35 percent this year, according to earlier statements by Petroleum Minister Sherif Ismail.
Smart cards will automatically be issued for all registered driving licenses, El-Araby said, with an online system for citizens to determine where to pick them up.