Kuwait plans to cut heavy subsidies on fuel, power
KUWAIT CITY - Kuwait's Emir Sheikh Sabah al-Ahmad Al-Sabah said Thursday that the Gulf country plans to cut heavy subsidies on fuel and power in a bid to offset a fall in oil revenues.
"We will lift subsidies and will raise the prices of petrol, electricity and water" and reduce subsidies for other services, the Al-Rai daily quoted the emir as telling editors of Kuwaiti newspapers.
Kuwait is the only member of the six-nation energy-dependent Gulf Cooperation Council (GCC) that has not hiked the prices of petrol and power after income from oil plunged.
Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain have either hiked or liberalised fuel and power prices, saving billions of dollars.
The emir however did not give any timeframe for the measures.
Last year, Kuwait liberalised the prices of diesel and kerosene.
The government has allocated around $7 billion (6.4 billion euros) in the 2015/2016 budget for fuel and power subsidies. A similar amount is earmarked for other forms of subsidies and social aid.
The Gulf state has posted a budget surplus in each of the past 16 years, accumulating fiscal reserves in excess of $600 billion. But Kuwait is projecting a deficit of $23 billion in this fiscal year, which ends March 31.
The price of oil, which contributes around 94 percent of Kuwait's revenues, has lost three quarters of its value since mid-2014. The price of Kuwaiti oil has slumped to just $19 a barrel.
The emirate has a native population of 1.3 million and is also home to about 2.9 million foreigners.