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Egypt to start rationing subsidized fuel in July
February 18, 2013 / 10:24 PM / 5 years ago

Egypt to start rationing subsidized fuel in July

CAIRO (Reuters) - Egypt will implement its delayed plans to ration subsidized fuel through a system of smart cards at the beginning of July, the country’s minister of petroleum and mineral resources said on Monday.

Egypt’s government is in the process of reforming subsidies in order to cut its budget deficit and secure a $4.8 billion loan from the International Monetary Fund, which is crucial to support its ailing economy.

“We are working, as part of the program, to implement it at the beginning of the new financial year (in July),” Osama Kamal said, when asked about the smart cards, in an interview broadcast on Egyptian channel CBC.

The quotas, to be implemented through a system of cards allowing drivers a limited amount of subsidized fuel, were due to start in April, just as the country is set to hold parliamentary elections.

On February 12, the minister said that the smart cards would be implemented between April and July.

The Islamist-led administration that took office in July vowed to push through a reform of subsidies, which swallow as much as a quarter of the state budget, to lower its deficit but is reluctant to hurt voters.

It eliminated subsidies on 95-octane gasoline, the highest grade available, late last year, prompting many motorists to switch to subsidized lower-octane fuel.

Egypt, which has endured two years of political instability since the ousting of President Hosni Mubarak, reached a preliminary agreement with the IMF in November.

Reporting by Asma Alsharif; Editing by Jason Webb

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