Kuwait City // A parliamentary panel in Kuwait on Sunday approved draft legislation calling for the scrapping of government plans to raise petrol and power prices to combat a budget deficit.
The financial and economic affairs committee said in its decision that “no increases in public charges and commodity prices” can be applied without a law being passed in parliament, its secretary Safa Al Hashem told reporters.
The decision will now go before the parliament for a vote that is expected to pass because a majority of lawmakers support preventing the government from raising such charges.
Under Kuwaiti law, the government has the power to reject parliamentary decisions – but MPs can also override such a rejection by a two-thirds majority in a fresh vote.
The opposition controls about half of the 50 seats in parliament following a general election in November.
The government has increased fuel prices and also plans to apply sharp rises in power and water prices in May as part of a series of measures aimed at financing a budget shortfall caused by low oil prices.
Kuwait posted its first budget deficit of US$15 billion (Dh55bn) in the 2015-2016 fiscal year after 16 years of healthy surpluses.
It expects a higher deficit in the year ending March 31, and has also projected a shortfall for the next fiscal year.
The other five members of the Gulf Cooperation Council – Bahrain, Oman, Qatar, Saudi Arabia and the UAE – have also implemented austerity measures following the drop in oil prices since 2014.
The International Monetary Fund urged Kuwait that month to enact further subsidy reforms to trim its budget deficit, despite their political sensitivity.
Kuwait has already utilised billions of dollars from its $600bn sovereign fund and resorted to borrowing and plans to issue domestic and foreign bonds worth $16.6bn.
* Agence France-Presse