 The Kuwaiti government is resolute on ending subsidies on diesel fuel due to growing fears of financial deficit. The country’s cabinet however has reaffirmed its commitment to mitigate any negative effects the decision may have on consumers.
Last May, the government reported that public expenditure outpaced revenues and could lead to a budget deficit by 2017/2018 if not checked.
“The council of ministers has decided in principle to stop subsidies on diesel,” said a representative of the Kuwaiti government. Nevertheless, the cabinet is waiting for a study by the higher planning council on ways to deal with possible negative effects on consumers.
Oil Minister Ali Al Omair told parliament that ending subsidies on diesel would save around $1 billion a year out of total subsidies of around $18 billion. Diesel currently sells at about $0.20 per litre.
The step is one of several recommendations by a government committee formed last October to review subsidies on all services and commodities after costs have soared.
Kuwait has had a budget surplus in each of the past 14 fiscal years, which has helped the OPEC member increase its sovereign wealth fund to over $500 billion.
Â
