No timetable set for smart card distribution: Petroleum ministry

Ahram Online, Wednesday 7 Aug 2013

Government remains committed to program but additional study necessary to avoid logistical pitfalls, official says

An Egyptian driver rests on his car as he refuels it at a gasoline station in Cairo (Photo: Reuters)

Egypt's government has not yet set a timetable to begin the distribution of fuel smart cards to motorists, a petroleum ministry spokesman told Ahram Online.

Egypt is in the process of introducing a new smart card system to regulate the sale of state-subsidised fuel to Egyptian consumers. The new system will initially be used to restrict the sale of subsidised fuel to card-owners, says the government, rather than to ration fuel.

The authorities have already implemented the first phase of the smart card system, which consisted of issuing cards for tanker trucks and gas stations and building a database of companies and depots for distribution.

In a statement released late in July, the finance ministry announced that the next phase of the program, namely the distribution of one million cards for diesel-powered vehicles and five million cards for gasoline-powered vehicles, would be gradually implemented throughout July, August and September.

The statement matched a timetable set by deposed president Mohamed Morsi's government in June, when former prime minister Hisham Qandil announced that Egypt's smart card system for subsidised fuel would come into effect in July for diesel and in August for gasoline.

Responding to media reports that the second phase's implementation has been delayed indefinitely, the petroleum ministry spokesman said that the government had not set a definitive timetable for the cards' distribution.

"It has not been delayed because no definitive timeframe has been set. And we are not tied to the plans of the previous government," said the spokesman.

Though the official could not specify when the cards might be issued, he pointed out a number of logistical challenges to be sorted out beforehand, such as training gas station staff to use the system and the thorny matter of how to issue smart cards to owners of vehicles without a traffic license, such as three-wheeled tuktuks and agricultural vehicles.

In a statement made to Al-Ahram's Arabic website earlier this week, energy committee chairman of the Federation of Egyptian Industries Tamer Abu Bakr welcomed reports of the delay, citing a host of technical problems which could wreak havoc if left unsolved before the smart cards were issued.

Abu Bakr was particularly concerned that under-trained gas station staff and first-time card users would disrupt fuel distribution, also citing the risk that power outages – a recurring summertime problem in post-revolutionary Egypt – might shut down smart card machines. 

But the government says the smart card system is only meant to curb smuggling, which officials say consumes around 20 percent of subsidised fuel.  Subsidised fuel accounts for almost a fifth of total budget expenditures.

The total bill for energy subsidies is expected to near LE100 billion in 2013/14, compared to some LE120 billion expected for the last fiscal year.

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