Egypt won't include quotas when it introduces smart cards for subsidized fuel despite the government being under pressure to cut expenditure, the country's oil minister Sherif Haddara said Thursday.
Egypt
won't
include quotas when it introduces smart cards for subsidized fuel despite the
government being under pressure to cut expenditure, the country's oil minister
Sherif Haddara said Thursday.
"The smart card system does not specify quotas or certain amounts of fuel
for each vehicle. The goal is to monitor the distribution and reach an accurate
estimate of the size of monthly consumption," Mr. Haddara said in a
statement posted on the oil ministry website.
Earlier this year, the cash-strapped Egyptian government said it plans to
introduce the fuel ration cards in July with different quotas for private
cards, taxies and truck drivers.
Mr. Haddara, who was appointed oil minister last month, has previously said
that Egyptians will get the cards by August or September.
Egypt
's
former oil minister Osama Kamal has repeatedly warned that by the end of the
current fiscal year, the amount allocated for energy subsidies will surge to
more than 120 billion Egyptian pounds ($17.16 billion) from the initially
budgeted EGP70 billion due to higher consumption and a sharp fall in the pound.
If no curbs are enforced on subsidies and consumption, the amount is expected
to rise to about EGP135 billion, he has said.
Egypt
has
been facing a diesel shortage since last year, leading to rising food costs,
long queues at filling stations and electricity blackouts. The fuel crisis has
compounded broader economic problems in the country, which in 2011 overthrew
the government of Hosni Mubarak in a popular uprising, paving the way for the
electoral victory of Mr. Morsi's Muslim Brotherhood.
Many Egyptians have already been using ration cards for decades to buy
specified amounts of rice, cooking oil, sugar, tea and pasta.
The government is short of funds and has been locked in negotiating with the
International Monetary Fund over a $4.8 billion loan, which analysts and
investors say is crucial for the country.
The IMF wants to see
Egypt
reduce its subsidy spending, as part of a reform plan for the loan, say those
close to the talks. But any subsidy changes will likely only enrage further the
legions of poor who rely daily on cheap fuel, making the already uncomfortable
summer months all that more unbearable. IMF officials left
Cairo
in
April without agreeing on the terms of the loan.
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