EGYPT’S fuel smart cards are back in the picture. This week and without prior notification the government decided to start their gradual implementation following the introduction of the initial idea in 2013. The first phase involved using the cards to track fuel from depots to petrol stations without leakages into the black market. The second phase involves the use of smart cards by consumers to buy fuel.
The process began in 2014, with consumers being asked to register their vehicles online and at specialised traffic departments in order to receive their cards. In 2015, a test run of the system was carried out, but the Ministry of Petroleum said it could not fully operate it until all types of vehicles, including Tuk-Tuks and agricultural tractors, were included.
This time around the government has decided gradually to implement the system, and it is primarily being used to provide a database of fuel usage. When the idea of the fuel smart cards was first introduced, the government said that it would be used to allow consumers to buy a specific quantity of subsidised fuel and any quantities above that would be sold at the free-market rate.
The system is part of the government’s plan to cut spending on fuel subsidies, and extensive fuel subsidy cuts were announced last November. While new cuts should not be due before the beginning of the new fiscal year in July 2017, some observers say they may come sooner due to the increased cost of imports on the back of the depreciation of the Egyptian pound following the floatation in November.
For now, there are no limits on the quantities of fuel that can be purchased, and if vehicle owners do not have smart cards, they can still buy fuel at the subsidised price. However, there is now a need for everyone to obtain a card — including the owners of passenger cars, Tuk-Tuks, agricultural tractors, fishing boats, and even baladi bread bakers who use petrol, diesel or Mazot fuel. There are 3,600 petrol stations around the country, and around 65 per cent of them are already implementing the new system. Ministry of petroleum spokesperson Hamdi Abdel-Aziz has been quoted as saying that 6.3 million cards have been issued and sent to the different traffic departments.
Cairo resident Noha Ahmed, who had her first card issued online in 2014 but has since sold her old car, does not have a card for her new car. She headed to the traffic department where she obtained the license for her car, but was told they did not know anything about the cards. She then heard representatives of the company in charge of the system saying that consumers could obtain smart cards through the mail, but upon trying the company’s website she found that it was not functional. It remains to be seen how such glitches will be dealt with.