12/04/2026
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12/04/2026
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KUWAIT CITY, April 12: Economist Yahya Al-Sumait, former board member of Kuwait Petroleum Corporation (KPC) and former State Minister for Housing Affairs, underscored the need for ministries and other government agencies to comply with the directive of the Ministry of Finance to rationalize spending, excluding essential items such as salaries. Al-Sumait pointed out that such fiscal discipline will mitigate the repercussions of the decline in oil revenues in the new budget due to the Israeli-American war against Iran.
He stressed that rationalization must be practiced under normal and exceptional circumstances to guarantee institutional readiness for unforeseen challenges. He stressed the need to follow the guidelines of the Finance Ministry on the integrity of procurement and contracting procedures, continuous monitoring of project execution, and thorough verification of expenditures.
He also highlighted the need to adhere to the proper utilization of allocated funds and to refrain from disbursements that violate legal procedures or limits. He asserted that strictly enforcing these procedures will reduce the current budget deficit to the greatest extent possible. Simultaneously, he cautioned against excessive and unjustified procurement or funding allocations, stressing that the vital needs must be prioritized in overcoming the crisis of declining oil revenues.
He added that while Kuwaiti oil production was not completely halted during the conflict, certain Kuwaiti investments abroad remain operational, and KPC oil tankers are full and awaiting passage through the Strait of Hormuz. He indicated that even if the situation started to stabilize on the fourth day of the temporary ceasefire, a total cessation of oil production will severely affect the state due to the 40-day export cessation. He commended the proactive role of Kuwait Petroleum Corporation (KPC) in securing storage in importing nations, but emphasized as well that given the current export disruptions, maximizing this storage capacity is vital to guarantee the availability of Kuwaiti oil in case the Strait of Hormuz closes again.
He also stressed the need for KPC’s international subsidiaries to expand exploration projects abroad by acquiring successful ventures capable of generating huge financial returns for the state treasury. He called for reviving the proposal to merge local oil subsidiaries into a single entity to reduce administrative spending by decreasing financial allocations for the boards of the directors of companies. He explained that such consolidation will increase profitability for KPC, citing the successful merger of Kuwait Integrated Petroleum Industries Company (KIPIC) with Kuwait National Petroleum Company (KNPC), considering that Zour Refinery transitioned from losses to profits during the initial stages of the merger.
He stated that the KPC management should initiate the merger of oil sector entities into a unified institution to reduce costs, eliminate non-profitable companies, and ensure flexibility by dismantling bureaucracy and complex procedures. He called for the private sector’s participation in bolstering the national economy, affirming that local firms have the financial capacity to support national development by implementing projects without imposing additional financial burdens on the state. At the same time, he emphasized the importance of expanding public private partnership projects to drive innovation, facilitate technology transfer, and provide financing. He said such partnerships are crucial for achieving sustainable development goals and attracting foreign investment.
By Najeh Bilal Al-Seyassah/Arab Times Staff
