Egypt is considering the postponement of the introduction of a fuel subsidy smart card system designed to reduce energy subsidies, which are crippling the state’s ability to deal with substantial debt. 

The government intended to bring the cards online on June 15, however, the Egyptian public has rallied against the measure. Fuel prices have been heavily subsidized for decades, however with a population of 87 million, this traditional assistance is proving a serious burden on the state’s economy. Last summer President el-Sisi’s government raised prices by up to 78 percent in a move that economists claimed was urgently needed to address the economic crisis but that has proved unpopular with the people.

BP’s recent Statistical Review of World Energy found that Egypt spent approximately $16.5 billion on oil product subsidies in 2014. Egypt is the largest non-OPEC oil producer in Africa and the second largest exporter of natural gas. However, with rising demand for natural gas, earlier this year the country recently started importing liquefied natural gas and limiting exportation of Egytian gas. The picture is not entirely discouraging, however, as recent field discoveries in the Mediterranean Sea and in Egypt itself have led the government to explore further foreign investment. Approximately 70 percent of the country’s electricity is provided by natural gas.

According to the report, Egypt’s oil consumption also currently surpasses current production levels, having increased by 3 percent over the past decade. While Egypt has the largest oil refinement operations in Africa, it is currently operating under capacity, however, a new refinery is expected to partially address the shortfall by late 2015.

While renewables are underutilized, Egypt is aiming to source 20 percent of its electricity production from solar (2 percent), hydro (6 percent) and wind (12 percent) resources by 2020. Currently, hydroelectricity is the largest contributor, standing at 9 percent of Egypt’s total energy. In addition, Egypt is currently planning to expand its power sharing connections throughout Africa and the Middle East. Egypt and Saudi Arabia currently have a $1.6 billion agreement to connect their grids with a 3,000 MW cable, enabling both countries to draw on the other’s supply at times of peak demand.