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Coupon hurdles

A subsidised butane gas cylinders coupon system is ready for launching, but a number of obstacles still stand in the way of its implementation, Nesma Nowar reports
After a dramatic butane gas shortage crisis that affected the whole of Egypt, a new coupon system for the distribution of gas cylinders is ready for implementation. The new system means ration card holders will get coupons that enable them to acquire subsidised butane gas canister at LE5 per canister, a significant reduction from the real cost of LE80. Those purchasing butane gas without a coupon are expected to pay LE25 per canister.

Ration card holders are provided with a monthly quota of basic food commodities including rice, cooking oil and sugar at subsidised prices, as part of a bid to support low-income families.

The coupon system is primarily aimed at achieving social justice and eradicating a flourishing black market, in which prices have risen as high as LE80 per canister during recurrent shortages in recent months.

Minister of Supply and Domestic Trade Gouda Abdel-Khaleq said the new system will save LE3 billion to LE4 billion of Egypt's annual subsidies bill. Moreover, he said, it will ensure that citizens get gas cylinders easily and at an affordable price. The new scheme applies only to households, and excludes the commercial uses of butane gas, as well as households using natural gas.

Abdel-Khaleq added that coupons have been distributed to ration outlets across the country in a final step before the implementation of the system. And while the ministry seems ready to kick-start the coupons system, the cabinet has decided to postpone its implementation until June, even though the system was set to start this month. According to press reports, the cabinet has agreed to postpone the application of the coupon system, in order to complete all the procedures needed for its implementation.

In fact last week, the parliament's energy and industry committee refused to implement the coupon system. Committee head El-Sayed Negeida told Al-Ahram Weekly that the decision came on the back of the fact that many Egyptian families do not have ration cards. This implies that they would not be able to get coupons for subsidised gas cylinders. This, according to Negeida, could lead to a crisis as some families would be buying cylinders at LE25, while those who have coupons would get them for less. "We are trying to solve a crisis, not to create one," he said.

Negeida said the system has shortfalls overall, and that the committee recommends the government delay its implementation until all Egyptian families have been issued ration cards. He suggested that instead of issuing a complete ration card, the government could find a way to issue cards dedicated to subsidised gas cylinder only. He added that there are roughly 10 million Egyptians who should be getting subsidised products, but do not have ration cards.

But Fathi Abdel-Aziz, head of the control and distribution department at the Ministry of Supply and Domestic Trade, disagrees with Negeida. He said there are 17 million ration cards benefiting 68 million citizens across the country. "This means that more than 85 per cent of Egypt's population has ration cards," he told the Weekly.

Abdel-Aziz added that last year, the ministry studied the obstacles facing the coupon system's implementation. It offered people needing ration cards a number of ways to get their ration cards throughout the past year, he said. He added that the coupon system would not be postponed. People going to pick up their butane canisters over the coming two months will be able to use their coupons, and buy them at LE5.

The coupon scheme means families of one to three members will get two butane canisters every two months, while bigger families with four or more members will get three canisters. But some have complained that this quantity is not enough to meet their needs. Abdel-Aziz said the ministry gives each citizen his fair share in light of available gasoline. He added that the ministry started distributing this quantity after conducting a survey in order to define the necessary quantity of butane gas.

Abdel-Aziz further pointed out that the ministry is making available a home-delivery service, in order to make it easier for those who cannot go and get it by themselves. "If the coupons system is implemented properly and the distribution process is firmly controlled, it should be very useful," government employee Khaled Mohamed told the Weekly. "I would be getting cylinders at LE5, instead of buying them for LE15."

© Al Ahram Weekly 2012

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