Oil in comfortable zone – Kuwait govt must push for privatization
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The current level of $64 for a barrel of oil is a very comfortable level for all oil producers now and perhaps till end of next year.
However, the recent events and developments in the Arabian Gulf region is making oil prices unstable and could escalate to higher than $65 a barrel, which is not good for the oil consumers for many reasons as it could lead to inflation and doesn’t give the final oil consumers the stability and confidence to continue consuming oil at stable level. So, oil producers must take some action if oil price goes beyond the $70 level. Of course, OPEC can simply relax its production cuts to ease the current tension and prevent speculators from heating up oil prices for their own gains.
We in Kuwait are clearly comfortable with the current level of $64, as it is close to our breakdown figure, in balancing our annual budget and would result in reducing our annual deficits to below KD 2 billion.
With the reduced deficits, it will be the aptitude of our MPs to demand from the government to reduced gasoline pump prices, and not to touch the current low level of electricity and water level, with additional benefits and allowances.
This is in addition to ignoring any recommendations to find another alternative to our sole source of income — oil. Now this will not happen, nor will it be addressed again since oil is going to last and it will be at a comfortable zone forever.
The government with its majority in the Parliament must push for privatization, move away from oil and encourage overseas investments inside Kuwait not outside. We should be creating job opportunities locally since creating them outside will be very hard if not impossible.
Now that the oil is in comfortable zone and hope it will last, the government should be serious about privatizing its oil sector and encourage foreign investors, as well as some governments departments like airport, sea port, post office, which for sure will run more efficiently.
We doubt our government will take some positive steps. However, this is just a reminder of the previous wish full of dreams of the past few years for some positive steps to be optimistic for the coming generation.
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