Cleaning companies face possible loss due to ‘fuel subsidy’ removal
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KUWAIT CITY, July 29: The cleaning companies contracted with Kuwait Municipality to clean the cities have complained that the Kuwait National Petroleum Company (KNPC) has stopped subsidizing fuel for government contracts related to public hygiene, reports Al-Qabas daily. In their complaint to the Head of the Municipal Services Sector Khalaf Al-Mutairi, these companies explained that they are Kuwaiti companies contracting with the municipality on contracts of “public hygiene – city cleanliness 2016-2017” for carrying out daily public hygiene activities for a period of five years in all regions of the State of Kuwait starting from October 11, 2019. Since the privatization of works related to cleaning of public areas and cities, the state has been subsidizing Kuwaiti companies contracting with the municipality for the fuel required by the fleet of vehicles and equipment designated in the contract, according to the needs and nature of those works. The fuel is disbursed according to the subsidized and allocated quota of 55 fils per liter by the Kuwait National Petroleum Company, However, in recent months, this support has been suspended, and the new quota is disbursed at 115 fils per liter for diesel, which is an increase of 109 percent compared to the previous price.
The companies affirmed that cancellation of the support has rendered them to incur serious and continuous damages as a result of the large numbers of machines, cars and equipment allocated in those contracts, which operate on a daily and continuous basis in accordance with the terms of these contracts. They stressed that, “This has caused huge accumulated and confirmed losses in the implementation of these contracts. This is happening despite the importance of these works and the extent of their impact on the environment and public health directly on the citizens and residents” The companies highlighted that the prices offered in the current public hygiene contract bids are low compared to the prices of the previous contracts, adding, “Undoubtedly, during the preparation of the feasibility study and the pricing of bids, the price of subsidized fuel was taken into account, based on which those bids were submitted at these low prices”.
They indicated that it is unfair to exclude several companies from the decision to stop fuel subsidies, and they are still receiving it constantly based on the instructions issued in this regard by a committee to reexamine the various types of subsidies provided by the state and the Kuwait Petroleum Corporation. The companies expressed their hope for receiving the required support, similar to the companies that were approved to continue receiving support by addressing the concerned authorities.
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