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Panel to re-evaluate subsidies on commodities Cabinet nod to diesel price hike proposal: sources

KUWAIT CITY, Aug 30: The committee in charge of reviewing the governmental subsidy, which is headed by the Undersecretary of Ministry of Finance Khalifa Hamada, is working on reducing the fear that many citizens experienced when the government made an announcement few months ago regarding its intention to reduce subsidy on 12 items with annual cost of about KD 5.5 billion, reports Al-Rai daily quoting reliable sources.

They explained that the committee aims to re-evaluate the governmental subsidy on basic commodities based on the rates recommended by the international organizations. Indicating that a possible reduction in subsidy of basic commodities will result in a hike in the prices of other items, the sources pointed out the experts’ viewpoint regarding such attitude which could result in the country bearing the consequences of the inflation of prices. They added that the committee is aiming to control any hike in prices for the financial protection of the citizens.

They said the committee is discussing several options such as providing cash subsidy or paying citizens directly or some other way, etc, adding some members of the committee proposed that the government must pay part of the subsidy by cash and the rest through pre-paid cards which the citizens can use for purchases. Meanwhile, the sources revealed that the Cabinet has agreed to a proposal presented by the committee to increase the price of diesel in the local market from KD0.055 to KD0.170, adding that the government has referred the proposal to the Supreme Planning Council. They explained that the decision to lift the subsidy on diesel based on the proposal will be applied in the stations that distribute it while the subsidy will remain in the major stations.

In other words, the price of the diesel provided to factories will not change so that it does not affect the industries because the goal of reducing subsidy is to provide it to those who deserve it and to control attempts to smuggle diesel. The sources stressed that the committee thinks it is necessary to reduce the governmental subsidy gradually and in phases, adding that the plan should be applied on one commodity in the beginning to assess the results before applying it for other commodities

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