| CAIRO, April 1
CAIRO, April 1 The Egyptian government is taking
too long to roll out an electronic smart card system designed to
reduce costly energy subsidies, the company contracted for the
project alleged on Tuesday.
Fuel subsidies account for a fifth of state spending, but
one cash-strapped government after another has resisted
attacking the wasteful system, fearful that raising fuel prices
could spark unrest.
Motorists will eventually use cards to buy gasoline and
diesel at fuel stations in a programme initiated by the
administration of President Mohamed Mursi before he was ousted
by the army last July.
But Khaled Abdelghany of e-Finance, the Egyptian firm in
charge of implementing the initiative, said the government was
delaying the reform unnecessarily by waiting until all 4.5
million registered drivers have signed up for and obtained
He said authorities should set a date on which the "points
of sale" already installed at fuel pumps would be activated.
Then the cards "would go very quickly, they would fly," he said.
The government says the programme is designed to counter the
black market and smuggling. Later on it aims to tighten up the
system but has declined to give details.
Former army chief Abdel Fattah al-Sisi deposed Mursi last
July after mass protests against his Muslim Brotherhood
Sisi, who declared his candicacy last week for presidential
elections to be held at the end of May, has spoken of the cost
of fuel subsidies but has given no clear prescription.
Asked why the authorities were not moving the smart card
programme along more quickly, government spokesman Hani Salah
said: "The decision will be taken at the right time."
Pump prices in Egypt are among the cheapest in the world.
Although Gulf aid in cash and petroleum products propped up
Egypt's finances in the months after the army takeover, the
economy is still recovering from political turmoil since the
2011 uprising that toppled autocrat President Hosni Mubarak.
The subsidies will cost more than $18 billion this year,
draining foreign currency that could be used to pay off debts to
foreign energy companies and improve payment terms to encourage
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 monitor deliveries.
Abdelghany said the system is ready to go and should be made
"We have more than 12,000 points of sale distributed all
over the country at the gas stations ... We have already trained
8,000 workers at the stations, all of which are connected to the
network," he said.
"There needs to be a decision from the government to begin
executing the project starting from date X."
The government has billed the smart card system as the first
step in a reform programme that would cut fuel subsidies by 25
to 30 percent in five to six years, but officials have
repeatedly missed deadlines to implement the system.
(Editing by Michael Georgy/Ruth Pitchford)