MPs QUERY PROCEDURE, IMPACT OF PRICE HIKE – New fuel pricing to kick in Thursday; Citizen files lawsuit

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KUWAIT CITY, Aug 31: The new fuel prices will be applied on Thursday, as being Octane-91: 85 fils per liter, Octane-95: 105 fpl and Ultra-Premium: 165 fpl. The Cabinet has approved the raising decision on August first, by recommendation of the economic committee.

The price increase will create a change in consumption of Octane- 91 and Octane-95, as more consumers will tend to use the Octane- 91, Chief Executive Officer of Kuwait National Petroleum Company (KNPC) Mohammad Al-Mutairi told KUNA on Wednesday.

KNPC has already prepared its fueling stations for such changes and provided sufficient amount of fuel to cover the rising demands in the local market, he added.

He noted that Al-Ahmadi and Al-Shuaiba refineries produce about 1.84 million liters of Octane-91, 9.39 million liters of Octane- 95 and 270,000 liters of Ultra 98, which is a total of 11.5 million liters of gasoline daily.

As for the daily consumption of all three types, Al-Mutairi said it is 1,833 million liters of Octane-91, about 9,135 liters of Octane- 95 and 267,000 liters of Ultra 98, with a total of 11,235 million liters of average daily consumption.

The growth of gasoline consumption in the past five years in Kuwait is about four percent, he said. In 2011, consumption rates were recorded at over 3,531 billion liters, about 3,682 billion liters in 2012, 3,810 billion liters in 2013, 4,006 billion liters in 2014 and over 4,122 billion liters in 2015.

The new pricing is close to international rates, said the official, noting that Octane-91 and Octane-95 are state-subsidies. The pricing decision was made to rationalize subsidies and improve the country’s budget deficit. Statistics show that after the raise, fuel prices in Kuwait will still remain the lowest among the Gulf States. The Cabinet has tasked a special commission to re-examine the State subsidies and the fuel prices every three months, to be in harmony with the global rates.

Meanwhile, His Highness the Prime Minister Sheikh Jaber Al-Mubarak Al- Hamad Al-Sabah has previously stressed that the decision was an “extreme necessity” for Kuwait to follow up with the economic changes in the world.

After the raising decision, the Ministry of Commerce and Industry announced it will not accept any raise in food items’ prices. Saudi Arabia raised fuel prices on Dec 28, 2015, Bahrain on Jan 11, 2016, Qatar and Oman on Jan 15, and UAE on May 29, 2016. Meanwhile, the Union of Cooperative Societies urged the stores on Wednesday to reject any unjustified increase of commodities’ prices by wholesale traders.

Saad Al-Shabo, the union chairman, said on a statement that some goods’ importers may hike the rates at pretext of higher costs due to the higher fuel prices.

Traders must abide by the rates set by the federation, he said. He urged societies’ stakeholders and consumers to report about controversial high prices of commodities. The union was established in 1971, signaling launch of the cooperative businesses in the country.

Queries
MP Saleh Ashour has forwarded queries to Minister of Commerce and Industry Dr Yousef Al-Ali on the cancellation of a ministerial decision to regulate the prices of goods and services. The lawmaker pointed out that on May 10, 2016; the minister issued decision number 146 whose first article stipulates “freezing the prices of goods, services and craft works starting from the date the decision took effect.” He said the other articles stated that any price increase, thereafter, shall be considered artificial and the necessary action will be taken against those who will violate this decision. He stressed this decision was taken before the Council of Ministers decided to increase fuel prices, while ministerial decree number 307 was issued on July 28, 2016 to cancel decision number 146.

He wants to know reasons behind the issuance of decision number 146 and its cancellation; procedures taken in relation to the fuel price hike; companies or institutions that increased prices from May 10, 2016 until the date of forwarding the queries to the minister, if any; and whether those who increased the prices were referred to the Public Prosecution or not.

Furthermore, MP Khalil Al-Saleh questioned Minister of Finance Anas Al-Saleh on the repercussions of the decision to increase the prices of gasoline.

He asked if there is a study on the effects of this decision on the prices of goods and services, basis for taking this decision, its effect on middle and low income earners, ministry’s definitions of low and average incomes, criteria used for these definitions, steps taken to protect consumers, plans to support low and middle income earners, and if there is coordination with other ministries to help the people cope with the rising prices.

Lawsuit
In another development, a citizen filed a fast-track lawsuit through his lawyer, Attorney Nawaf Al-Fuzei, at the Administrative Court, petitioning against the government’s decision to increase fuel prices which he considers a huge burden on him and the rest of the families once enforced.

The petitioner indicated he has the right to file the lawsuit, given that he is a citizen and he has a personal licensed vehicle, so he has direct interest in the matter — a condition for filing such a lawsuit.

He accused the government of overstepping its authority as per Article Four of law number 6/1980 on the establishment of Kuwait Petroleum Corporation which is in charge of oil marketing and gas for the revenue of the State in accordance with the financial basis recommended by the oil minister and endorsed by the Supreme Petroleum Council, while a law was issued in this regard.

He pointed out benzene is one of the oil derivatives, so the fuel price hike decision is against the above mentioned law stating that determining the price of fuel should be in the hands of Kuwait Petroleum Corporation as well as based on the oil minister’s proposal and endorsement of the Supreme Petroleum Council. He stressed it should be seconded by issuing a law in this regard.

However, the decision was taken by the government, so it is considered illegal as per Article Four of law number 20/1981 on the establishment of the court which handles administrative disputes. This decision is governed by Article One, Item Five of the law on the requirements which should be met by individuals or establishments to cancel final administrative decisions.

The petitioner added the decision of the government violates Article 21 of the Constitution which states that, “Natural resources and all revenues there from are properties of the State. It shall ensure their preservation and proper usage, while due regard should be given to the requirements of State Security and national economy.”

In the article’s explanation document, the petitioner pointed out that benzene is one of the natural resources owned by the State and the people, indicating it is not the property of the government to deal with it as the authority wants. He stressed this necessitates the enactment of a law on anything related to natural resources, but the government did not take such as step. He added the decision contravenes rules on national security and social peace of the State and the citizens, taking into consideration that the petitioner’s financial and personal positions have been affected by this decision. The petitioner also invoked Article 134 of the Constitution which states, “No general tax may be established, amended or abolished except through a law.

No one is exempted, wholly or partially, from the duty to pay such taxes except in cases specified by law. No one is required to pay any other tax, fee or charge unless it is within the limits of the law.” In this case, the decision of the government was not presented to the Parliament in order to be supported by legislation, let alone the failure to adhere to Article Four of law number 6/1980 on the establishment of Kuwait Petroleum Corporation and its mandates.

The petitioner concluded that as per Article Six of law number 20/1981 on suspending the enforcement of a decision if proven it will cause significant damage to the petitioner, the court should suspend the government’s decision to increase fuel prices until the petition is settled, because without a doubt, it will negatively and significantly affect the petitioner.

By Abubakar A. Ibrahim Arab Times Staff and Agencies

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