The government is determined to restructure subsidies on petroleum products so that only those who truly need the subsidies would be able to benefit from them, said Petroleum Minister Osama Kamal on Monday.
“We subsidized petroleum products with LE114 billion last year, 80 percent of which went to people who didn’t actually need [the subsidies],” Kamal said in a press conference.
“We have not yet finalized a new policy. Once we do, we shall open it up to dialogue,” he continued.
The minister added that according to current plans, diesel fuel used by minibuses and tuk tuks would remain subsidized. Fuel used by buses of private universities, yachts and tourist facilities, on the other hand, would be re-priced to cost.
“It was our sovereign decision to restructure subsidies,” Kamal said. “We are not being pressured by any outside force.”
He added that the government is set to provide a strategic stockpile of butane gas that would last for 15 days to help stave off the fuel shortage problem, and that President Mohamed Morsy would allocate US$1.5 billion to cover butane gas imports.
“We stopped exporting gas in June due to growing domestic need,” Kamal said. “And we are now considering importing gas from Algeria and Qatar.”
Petroleum Ministry undersecretary Mahmoud Nazim said subsidized butane gas cylinders would be distributed via a system of smart cards and coupons.
“We would thereby save some 80 to 90 percent of the subsidies,” he explained.
Nazim added that the distribution pipeline project, Erot Smart, would be rolled out through select, authorized distributors which would be equipped with machines that would distribute the cylinders once consumers swiped their smart cards.
Butane gas subsidies stood at LE20 billion the 2011/2012 fiscal year.
Edited translation from Al-Masry Al-Youm
