Kuwait’s National Assembly or parliament yesterday held a rare meeting with the Supreme Planning Council to review government plans to reform the economy in the face of declining oil prices.
Oil revenues contribute to more than 95% of the Gulf nation’s earnings.
The meeting discussed measures the government proposes to take to finance the budget deficit projected at a record $38.36bn, mainly by lifting subsidies on electricity, water and petrol, the Kuwait Times daily reports.
Member of Parliament Yousef Al-Zalzalah told Al-Anbaa newspaper that the government has proposed to raise petrol prices to 85 Kuwaiti fils a litre for low-grade 90 octane fuel, and 105 fils a litre for 95 octane petrol.
He also mentioned that the government wants to raise electricity charges from 2 Kuwaiti fils per kilowatt currently to 5 fils per KW for the first 3,000 KW; 10 fils for between 3,000 and 6,000KW and 15 fils for consumption above 6,000 KW.
Kuwait so far remains the only country in the GCC not to remove fuel subsidies as all other five members – Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates – have taken such measures.
Kuwait’s ex-oil minister Ali Al-Omair, who is now Minister of Public Works and State Minister for Cabinet Affairs told local media after the meeting that the issue of subsidies occupied a small part of the meeting, which focussed mainly on the wider scope of economic reforms and measures to cut government spending.
Omair said that all sides are in agreement for the need to reform the Kuwaiti economy and tackle imbalances in it, represented in its total dependence on oil as the main source of income.
The country’s projected fiscal deficit accounts for 64% of the budget, and accordingly measures have to be taken in this direction to finance the budget, Nasser Al-Roudhan, head of the Planning Council Economic Committee, was quoted as saying.
