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Kuwait mulls cuts to $9 billion energy subsidies

Cuts won't hurt low earners, according to minister.

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Kuwait spends billions on subsidies every year.
Kuwait spends billions on subsidies every year.

Kuwait Finance Minister Anas Al Saleh has sought to play down any possible impact from the country’s proposed subsidy reforms, saying the government had no intention to hurt low-income earners, it was reported.

Kuwait needs to reduce subsidies by at least 15 percent in two years, according to the emirate’s finance ministry, with sources saying earlier this month that there was a “general agreement” among a specialised committee that the country needs to make the cut while maintaining subsidisation rates for basic services.

The committee, formed to study ways the government can cut its subsidies with limited social impact, is also said to have agreed that energy is likely to be one area where rations are expected to be enforced.

Energy subsidisation currently costs $8.9bn (KD2.5bn) annually, with Kuwait paying about $19.3bn (KD5.4bn) each year for subsidies on fuel, energy, construction material, and food.

In comments reported this week by Arab Times, Al Saleh said removing the subsidies would not affect citizens and expatriates negatively, adding that the issue was still under consideration.

Minister of Electricity and Water Abdulaziz Al-Ibrahim said several studies had been carried out on the classification of consumption, but no specific decision had been made.

Meanwhile, the country is facing a multitude of issues relating to the proposed removal of subsidy on fuel, electricity and water, and the upcoming by-election to replace the five lawmakers who tendered their resignation recently.

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