Smart card system for fuel goes into effect this January, says finance minister

New smart cards for fuel will go into effect in January, marking the second phase of restructuring petroleum subsidies, Finance Minister Hany Kadry Dimian announced in a press conference on Wednesday.

The smart card system has already been finalized in Port Said and will be implemented there starting in October, then spreading to the rest of the nation in 2015, the privately owned newspaper Al-Shorouk reported.

"As soon as fuel consumption is regulated, Egypt will enter the second phase of restructuring the subsidization of petroleum products by allotting specific quantities of fuel to each card," Kadry Dimian explained in the presser.

The Cabinet began restructuring some petroleum product subsidies in July. This led to sharp price hikes in some of the most used petroleum products, such as diesel, 80, 92 and 95 octane gasoline, and natural gas for vehicles. The government claimed that the new subsidy system would save around LE51 billion in this year's budget, half of which would be diverted to healthcare and education.

Last August, former Finance Minister Ahmed Galal said that the smart card system would save the state more than LE40 billion a year by stymying fuel smuggling. It would also provide the government with a database of petroleum consumption rates in each governorate, he said, which could be useful for planning in times of shortage.