Strategic alternative and the Kuwait’s ‘oil sector’ – KPC needs to reduce its costs

This news has been read 5193 times!

Kamal Al Harami
Kamal Al Harami

The current dispute between the government and the oil sector is concerning the government’s proposal to implement the Strategic Alternative to Salary Scale for unifying the salaries and benefits provided to all state employees including the employees of the oil sector. However, the government has excluded the military, diplomats, doctors and engineers from this proposal. This is the main reason behind the dispute, especially since the governments of Oman and Abu Dhabi have excluded the oil sector from their respective proposals in this regard.

Of course, the salaries of Kuwait oil sector have increased and reached the height in the last few years which has annoyed almost everybody. The annual salaries given by Kuwait Petroleum Corporation (KPC) and its affiliated companies to close to 20,000 employees have exceeded KD1.5 billion in total. The salary level is increasing and could easily reach KD2 million in less than three years. Disbursement of such huge salaries and benefits is the reason why the government is so frustrated, as the latter is under pressure to offer similar packages to the employees of other public sectors.

Even though we do agree that the benefits including bonuses and shared profits have exceeded the limit, the government should be blamed for not acting on time. The damage has already been done and the oil sector will not agree to the proposed strategic alternative. Either the government or the KPC board must come up with ideas to reduce the huge benefits and maintain employees’ productivity especially the creative and active employees who have been contributing positively. They should be selective and focus on engineers and technicians, not the office workers whose roles are similar to that of civil servants.

The project of Strategic Alternative to Salary Scale is not going to work in the oil sector, as the employees of this sector function differently from other government employees on the basis of the nature of the businesses and activities. This is the reason why diplomats, doctors and lawyers are allowed different structural payroll; but the oil sector employees have been excluded from this.

KPC should come up with a policy for reducing costs by a certain fixed percentage, in line with a clear strategic long-term vision, similar to the international oil companies but without firing any of its employees. The decision should come from within our oil industry and everyone should be committed to it with the facts and figures.

Imposing a strategic alternative that is not developed by the KPC board and management will never work.

Email: [email protected]

By Kamel Al-Harami – Independent Oil Analyst

This news has been read 5193 times!

Back to top button

Advt Blocker Detected

Kindly disable the Ad blocker

Verified by MonsterInsights