Gulf states begin reforms as oil prices to remain low – Is it not time for Kuwait govt to act?

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Kamal Al Harami
Kamal Al Harami
Last week, Saudi Arabia announced substantial increase in fuel and energy prices within 24 hours. The price of gasoline increased by 66 percent while that of electricity and water was lower. It had to be done swiftly and firmly. Bahrain followed suit as the prices of kerosene and diesel increased starting from the first day of the year.

The two countries followed the example set by the United Arab Emirates a few months ago when it decided to ‘linearize’ fuel prices set against international prices which will be reviewed monthly.

Is it not time for us in Kuwait to do the same? Are we not as hurt like our neighbors and why delay it? Are we not incurring losses considering the government spends more than KD 5.11 billion in subsidies and 75 of which goes to fuel, electricity and water. This figure is expected to increase by more than seven percent annually.

The round is set now for our government to act and it has the support of the public as our annual deficit is on the rise. This step must be taken provided that the increase will not hurt the pockets of household heads or anyone living on this land. For example, an increase of one Kuwaiti Dinar per week for gasoline. This amount is usually spent on tips in shopping malls weekly.

Water and electricity fees should be based on consumption – the more the consumption, the higher the tariff. It must be based also on home ownership and the single house owner should pay the current fee. In this manner, everyone will be treated equally and there is no room for complaints.

The actions taken by two Gulf States last week made the task of the government much easier and can only point to our next door southern neighbor.

It’s a golden opportunity for our government to take action and not to lose the momentum. At the end, we save some wealth for our the future generation as the price of oil will remain as it is in the coming years.

Email: [email protected]

By Kamel Al-Harami

Independent Oil Analyst

This news has been read 5843 times!

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