Kuwait subsidises fuel after price hike

The Kuwaiti government yesterday agreed to compensate citizens for hiking petrol prices in a plan to “partially liberalise” the fuel subsidy.

The decision comes after a hike in fuel prices that went into full effect on 1 September ranging from about 40 to 80 per cent depending on the type of fuel. The price rise is part of the government’s reform measures to plug a budget deficit resulting from low oil prices. It was the first increase of its kind since 1998.

Kuwaiti citizens who hold a valid driving licence would be compensated with 75 litres of petrol each month, parliament speaker Marzouq Al-Ghanim told reporters after a three-hour meeting between the government and lawmakers.

The cost of petrol would be revised on a monthly basis depending on the price of oil on international markets, he said, adding that this represented a “partial liberalisation” of subsidies.

Foreigners, who make up almost 70 per cent of the oil-rich Gulf state’s 4.3 million population, will continue to pay the full price.