The government will save approximately EGP 40bn if it implements the second phase of the fuel smart-card scheme, said former petroleum minister Osama Kamal.
Kamal expects the government to put the second phase of the smart-card system into effect during the 2014/2015 fiscal year (FY) to trim the fuel subsidy bill and stop fuel profiteering.
The government has so far distributed 2.6m out of the targeted 4.5m smart cards, said Tareq Al-Mula, chairman of the Egyptian General Petroleum Company (EGPC).
The EGPC has also distributed 11,000 smart-card machines to petrol stations at a cost of EGP 3,000 per machine, he added.
Al-Mula also said that the Egyptian government has adapted 15 petroleum product marketing companies working in Egypt, 102 fuel depots and 2,646 petrol stations nationwide to the new smart card scheme.
Up to 748 companies were provided with 1,666 distribution points and 662 shipping agents equipped with trucks, tractors and trailers to transport oil products, he added.
The new smart-card scheme has contributed to the availability of accurate statistics that enable the government to follow up on the market and slash high fuel subsidies, Al-Mula said.
Immediately following President Abdel Fattah Al-Sisi’s taking office in July, the government raised fuel prices by up to 78% to plug a widening gap in its budget.
The country’s budget deficit stood at 12% for FY 2013/2014, according to Minister of Finance Hany Kadry Dimian.
Al-Mula said that the new fuel scheme aims to put an end to fuel profiteering, placing fuel subsidies in the hands of Egypt’s neediest citizens.
The subsidy cut is expected to save the state EGP 50m which will be allocated to upgrade health and education services.
Al-Mula called upon officials and citizens to join forces so as to bring the system into operation as soon as possible.