Kuwait to raise fuel prices due to squeezed subsidy budget
Prices are expected to increase from 60 to 85 fils per litre for 91 octane, from 65 to 105 fils per litre for 95 octane and from 90 to 165 fils per litre for 98 octane. (File photo)
Kuwait has allocated a far smaller amount for petroleum and gas subsidies in its 2016/2017 budget than previous years, according to reports.
Kuwait Times cited the head of the National Assembly’s budgets committee MP Adnan Abdulsamad as saying the budget would include KD 238m ($791.4m) for petrol and gas products this year.
The amount is far less than the “billions of dinars” that used to be allocated to subsidies in previous years when oil prices were higher, according to the official.
The announcement comes amid reports suggesting the government plans to partially lift subsidies on petrol in July.
Kuwait Times said local reports yesterday suggested the government planned to raise prices for various grades of petrol by between 40 per cent and 80 per cent to reduce its subsidy costs.
Prices are expected to increase from 60 to 85 fils per litre for 91 octane, from 65 to 105 fils per litre for 95 octane and from 90 to 165 fils per litre for 98 octane.
They are also expected to be linked to international oil prices, like in other Gulf countries.
Last year the country lifted subsidies on diesel, kerosene and aviation fuel.
The official said the budget would include KD 310m ($1.03bn) for ration card subsidies relating to food items and construction materials for Kuwaitis. However, this too may come under review.
A further KD 266m ($884.6m) is being allocated for international aid and KD 300m ($997.6m) in social aid to 42,000 recipients. In addition, KD 125m ($415.6m) is being allocated to patients seeking medical treatment abroad, far less than the KD 300m in the previous budget.
The publication cited Abdulsamad as saying the committee had urged the government to carry out budget reforms at independent government and semi-government bodies and departments, which receive KD 4.6bn ($15.2bn) in state funding.
Kuwait is expected to post a budget deficit of KD 12.2bn ($40.2bn) for 2016-2017, nearly 50 per cent higher than the previous year.
By Robert Anderson
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