Egypt to ration fuel

Egypt is to introduce a trial "smart card" system for subsidised fuel in July and August, allowing consumers to buy a limited amount of subsidised fuel, beyond which they must pay market prices.
The move was announced on 23 May by oil minister Sherif Haddara who last February said the scheme would be introduced between April and July. 

The first smart cards will be issued to almost 3,000 gasoline stations in June, to regulate fuel distribution, before the programme is expanded to include owners of private vehicles in July and August.

The oil minister said that issuing cards to the fuel stations first would give distributors time to get used to the new system before it is rolled out nationwide later in the following months.

The system is to reduce Egypt's energy subsidy bill, a key requirement by the International Monetary Fund (IMF) in order for the country to qualify for a $4.8 billion loan from the IMF. Currently Egypt spends a fifth of its budget on subsidising energy products which are sold at prices substantially below the production cost.

Last November Egypt eliminated subsidies on 95-octane petrol, the highest grade available, resulting in many motorists making the switch to subsidised lower-octane fuel.

Egypt is finding it increasingly difficult to pay for fuel imports, and in April it received $5 billion in financial aid from Qatar and Libya.