* Gulf states have already promised Egypt $12 bln in aid
* Egypt to pay 25-30 pct of $6.2 bln owed to oil firms soon
* Govt delays start of smart card system till next year
By Ehab Farouk
CAIRO, Oct 1 Egypt is negotiating with Gulf
countries to supply it with badly needed petroleum products into
2014, hoping to ease pressure during a volatile political
transition to elections.
Public opinion has turned against the army-backed
government's foes, the Muslim Brotherhood, but any shortages of
basic commodities could also make the country's leaders
Saudi Arabia, Kuwait and the United Arab Emirates have
already agreed to supply Egypt with oil products until the end
of December, and Egypt is now discussing further supplies, Oil
Minister Sherif Ismail told a news conference on Tuesday.
"Egypt has informed the Gulf countries of the size of the
fuel supplies it will need after December and the three Gulf
countries are now studying these needs," Ismail said.
Foreign Minister Nabil Fahmy said at the United Nations on
Saturday that the transitional phase of drafting a new
constitution and electing a new parliament and president should
end by next spring.
The three Gulf countries, which pledged to provide Egypt
with $12 billion in aid after the army ousted Islamist president
Mohamed Mursi on July 3, have been sending diesel, gasoline and
fuel oil to Egypt since July, Ismail said.
Egypt has been struggling to meet soaring energy bills
caused by the high subsidies it provides on fuel for its 85
million population. The subsidies have turned the country from a
net energy exporter into a net importer over the last few years.
The government, seeking to avoid public unrest, has delayed
oil payments to foreign oil companies producing oil and gas on
its territory. Some of the debts were accumulated even before
the popular uprising that ousted Hosni Mubarak in early 2011.
Egypt will repay 25 to 30 percent of the $6.2 billion in its
arrears to the oil companies in the near future, Ismail said.
The collapse of tourism and foreign investment since the
uprising has deprived the country of two of its main sources of
Finance Minister Ahmed Galal said in an interview last month
that Egypt wants to encourage foreign oil companies to increase
exploration and production in exchange for a more rapid
repayment of the money it owes them.
The government has been grappling to reduce the cost of its
energy subsidies, which make up 20 percent of all state
expenditure, without angering its citizens.
It hopes to implement a smart card system at the start of
2014 for fuel purchases by vehicle drivers, Ismail told the news
This marks a new delay in the smart card system, which has
been in the planning stage for at least a year. In July, the
finance ministry had said it planned to phase in the card system
gradually in July, August and September.
Analysts say the logistics of implementing of the smart
cards is a political and bureaucratic minefield.