Kuwait boasts of lowest fuel prices among GCC states
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KUWAIT CITY, Jan 4: Kuwait boasts the lowest fuel prices among Gulf states and ranks second in the Arab world, according to a research paper by the International Monetary Fund which focused on inflation rate shifts in Gulf countries from 2019 to 2022.
The paper attributed the global rise in inflation to heavy reliance on imports and heightened consumer spending amid increased oil prices. Despite this, certain Gulf countries experienced lower increases in specific sectors due to government support.
The research assessed the impact of inflation on three sectors — food, housing services, and fuel — in Gulf countries. The report highlighted that the Gulf’s elevated inflation rates stem from a significant dependence on imports, double that of advanced economies, exacerbated by global market challenges like geopolitical tensions and the conflict in Ukraine disrupting supply chains.
Kuwait emerged as the Gulf country with the lowest fuel prices and the second-lowest in the Arab world. It experienced a marginal 1% decrease from global price averages between 2019 and 2022, ranking just behind Algeria. Notably, all Arab countries surveyed demonstrated lower changes in fuel prices compared to the global average, except for the UAE.
Kuwait’s annual imports accounted for 43% of its gross domestic product, positioning it third among Gulf nations. The UAE topped the list with an 80% import-to-GDP ratio, followed by Bahrain at 68%. Oman ranked fourth at 42%, while Qatar and Saudi Arabia had the lowest ratios at 38% and 29%, respectively.
In terms of the import-to-trade-exchange ratio index (value of imports + value of exports), Kuwait led with a percentage ranging between 41% and 46%, surpassing other Gulf nations. Qatar recorded the lowest rate in this category.
The contribution of housing and food services to the rise in inflation rates varied across Gulf countries. Kuwait led in the contribution of food price increases, while Qatar took the lead in housing services. Kuwait also ranked second in the overall contribution of housing services to inflation rates, after Qatar.
The report highlighted the decline in the contribution of food price increases in other Gulf countries, with Saudi Arabia experiencing a gradual decrease from 2020 to the previous year. The UAE saw a neutral impact in 2021.
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