Kuwait is planning to gradually cut subsidies on energy products, an official said yesterday.
The move comes as the country follows in the footsteps of its Arabian Gulf neighbours seeking to relieve pressure on their finances hit by dwindling oil income, a Kuwaiti official said yesterday.
“We see that subsidy will be taken out gradually, in phases,” said Nizar Al Adsani, the deputy chairman of the state-run energy company Kuwait Petroleum Corporation (KPC), at a renewable energy conference in Abu Dhabi.
“Things will take time but hopefully in the first quarter of 2016 something will happen on subsidy and on petrol, diesel, kerosene and others. It is an ambitious plan especially given the investment element with the low oil price.”
With oil prices trading at less than US$30 per barrel, down more than 70 per cent since June 2014, Gulf governments have been quick to come up with reforms to shore up their fiscal stability.
The IMF has urged Gulf countries to remove subsidies, impose taxes and trim spending to plug their fiscal deficits.
The fund has warned that regional economies could use up their financial buffers within five years as they face a combined fiscal deficit exceeding $700 billion between 2015 and 2019.
Separately, Mr Adsani said that KPC plans to announce this month the banks that will help finance the $10bn clean fuels project, which aims to increase capacity and upgrade two refineries in Kuwait.
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