Mr Osama Kamal petroleum minister of Egypt as saying that the government faced a tough challenge to implement a coupon plan designed to cut massive energy subsidies which eat up around a quarter of government spending.

Mr Kamal said that annual subsidies of EGP 114 billion disproportionately benefit the wealthier in society. Egypt's budget for the year ended June 30 was EGP 476.3 billion. Introducing the program would need strong political will unlike previous governments which baulked at taking unpopular austerity measures.

A vote on the coupon system is expected after a constitution is approved by a constituent assembly is approved, a process that could take many months.

Mr Hisham Kandil PM of Egypt said earlier this month that the government wanted to tackle fuel and other subsidies via a coupon or smart card system in October to ensure the poor rather than everyone, gets subsidized butane cooking gas. Subsidies would also be cut on 95 octane gasoline and other fuel handouts would be reviewed.

Mr Kandil said that the government is struggling to reduce a budget deficit running at 11% of gross domestic product and has to sell economic restructuring to Egypt's 83 million people many in dire poverty and desperate to see the benefits of the popular revolt that ousted Hosni Mubarak in February 2011.

Source - Reuters

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