Bahrain will raise prices of natural gas sold to industry users, official news agency BNA has reported.
The price of natural gas will be unified and raised gradually from 1st of April, the agency reported without specifying the size of the increases.
The cost of natural gas used to generate energy for industrial projects will also rise.
Bahrain’s cabinet “stressed that the readjusted natural gas prices for power generation will not affect citizens nor will it have an impact on Bahrain’s competitiveness or its ability to lure investors in the industrial sector”, BNA said.
State subsidies keeping gas prices down put a major strain on the government’s budget. As many as 35 companies benefit from natural gas subsidies worth $1.62bn annually, the Gulf Daily News quoted officials as saying last year.
Compared to other Gulf countries like Saudi Arabia, Qatar or the UAE, Bahrain’s wealth reserves are weaker making its budget more threatened by low oil prices.
Survey by Reuters suggests that this year the kingdom would suffer a budget deficit of 5.7% at an oil price of $97 a barrel.
At the current oil price of $46 a barrel the deficit might be much bigger.
