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Government proposes new gasoline prices – Deficit eyed

Lightning strikes across Kuwait skies Saturday evening as the country experienced heavy downpour
Lightning strikes across Kuwait skies Saturday evening as the country experienced heavy downpour

KUWAIT CITY, Feb 28: The government has proposed the following gasoline prices: 90 fils for Premier, 119 fils for Super and 127 fils for Ultra, says MP Mohammad Tana.

Tana made the announcement after the parliamentary Finance and Economic Affairs Committee meeting presided over by National Assembly Speaker Marzouq Ali Al-Ghanim Sunday.

They discussed a number of topics related to the economic situation, ways to address deficit in the State budget and clarifications on the vision of the government in this regard. Tana disclosed the citizens will be compensated in case the prices of gasoline, electricity, civil ID or driving license issuance will increase, but no agreement has been reached on the mechanism. He confirmed the citizens, especially the low and middle-income earners, will not be affected.

On the other hand, MP Saud Al-Hariji said the government has presented recommendations regarding petrol and electricity prices. He added the government suggested subsidizing gasoline 91 but not Ultra, although nothing has been finalized yet.

The government’s vision to support the national economy consists of six integrated pivots, Deputy Prime Minister, Minister of Finance and Acting Minister of Oil Anas Al-Saleh said on Sunday.

They are financial reform, redrawing the state role in national economy, enhancing the role of the private sector, involving citizens in owning projects and reforming the labor market and the civil service system, in addition to legislative and executive reform, Al-Saleh added.

The minister made the press statement after he attended a meeting for the Parliamentary Committee on Financial and Economic Affairs. The meeting discussed the executive measures and programs for the implementation of each pivot, he said. There are 23 short-term programs and 13 medium- term, besides 4 short to medium term ones.

According to the minister, the parliamentary committee also discussed a government proposal for rationalizing fuel subsidy. A number of MPs suggested offering this subsidy to a certain category of citizens. The proposal will be discussed.

Moreover, the committee addressed a study submitted by the Ministry of Electricity on the new consumption categories. Discussions will be resumed on Thursday. Rationalization of subsidy aims to avoid any harm on low and medium-in-come classes, the minister said. He noted that the government seeks to boost the culture of rationalization through repricing services.

The issue will feature high on the agenda of a meeting between the legislative and the executive authorities on Thursday, that will also address the draft document which National Assembly Speaker Marzouq Ali Al-Ghanim aspires to on economic reforms, Al-Saleh said.

The government unveiled a plan to reduce state expenditure by 25 percent to redress the enormous budget deficit caused by the sharp decline in oil prices. The plan was disclosed at the special meeting. In a press statement following the meeting, the Committee Chairman MP Faisal Al-Shaya said that the meeting also tackled plans to rationalize subsidies for basic services and commodities as well as to increase revenues through privatization of some projects and expanding public private sectors’ partnership projects.

The government stated that it aims to downsize state institutions budgets by 25 percent and to rationalize electricity and water subsidies. It expected that the rationalization of electricity and water subsidies would help save KD 1.2 billion (roughly USD 3.98 billion), he said. Al-Shaya revealed that lawmakers have proposed issuing fuel coupons for nationals to get 220 liters of rationalized fuel per month, and to lift the fuel subsidies totally. He, however, noted that no decision was taken in Sunday’s meeting as the committee and the government would convene next Thursday to agree on the main outlines of the economic reforms before moving to the details of each proposal. He concluded that a series of meetings with the government would be held the coming weeks to agree on the plan. He expected that the committee would finish studies and present its report to the National Assembly’s general session before April 1st.

The meeting was attended by Deputy Prime Minister, Minister of Finance and Acting Minister of Oil Anas Al-Saleh, Minister of State for Cabinet Affairs and Acting Minister of Electricity and Water Sheikh Mohammad Abdullah Al- Mubarak Al-Sabah, Minister of Public Works and Minister of State for National Assembly Affairs Ali Al-Omair, Minister of Social Affairs and Labor and Minister of State for Planning and Development Affairs Hind Al-Sabeeh and Minister of Trade and Industry Yusuf Al-Ali. Also attending the meeting were several senior offi cials for the concerned ministries and state institutions.

In another development, Tana has asked Minister of Social Affairs and Labor Hind Al-Sabeeh to cancel all procedures taken to privatize Dasma and Bneid Al-Gar Cooperative Society. He stressed, “All those responsible must be referred to the Public Prosecution as they have violated the Cooperative Societies Act and Criminal Law.” He warned the minister might face another interpellation if she does not stop privatization of the cooperative.

Commenting on the same issue, Al- Hariji asserted the privatization of cooperative societies will disrupt work in this field. He argued privatization entails elimination of the cooperative sector, indicating the circumstances surrounding the voting on privatization despite the absence of majority of the shareholders raises more questions and doubts. He suggested that it is better to activate the role of cooperatives rather than privatize them. He said this might be a bone of contention between the executive and legislative authorities if the minister presses ahead with the plan. He added he will submit questions to the minister in order to clarify the issue and determine the next step that must be taken.

By Abubakar A. Ibrahim Arab Times Staff and Agencies

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