Kuwait to debate scrapping fuel subsidies for expats

  • Share via facebook
  • Tweet this
  • Bookmark and Share

The Kuwait Parliament is reportedly prioritising the proposal to lift the subsidisation of petrol for expatriates and reduce subsidies on electricity despite mixed support from MPs, it was reported.

MPs have called for more analysis of the proposal, with some warning it could lead to the revival of a black market.

Head of Finance Committee MP Faisal Al Shaye said such subsidies depleted government funds, Arab Times reported.

MP Abdullah Al Tamimi insisted that removing subsidies for 2.8 million expatriates in the country would help the country save hundreds of millions of dollars, as well as control traffic congestion.

Currently, Kuwait spends around 47 fils to produce one kilowatt of electricity, which it sells to consumers for just 2 fils.

If the subsidy is lifted an expatriate would have to pay 22 times the current rate for power consumption, meaning a current KD25 ($88.9) per year power bill would rise to KD550.

In many cases, expatriates currently do not pay the electricity bill, as their electricity and water charges are included in their monthly rent. However, the removal of electricity subsidy could lead to changes in their rental contracts and installation of an electricity meter in each apartment, the newspaper reported.

If the petrol subsidy is removed it would cost 2.5 to three times the current price, driving up an annual KD200 petrol bill to KD500-600.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Louie Tedesco

Fuel prices for Kuwaiti citizens must be subsidized by the expat population, just as their cost of electricity and water is borne by expats. Gratitude must be shown to our hosts who allow so many different nationalities to work in Kuwait. If the fuel price were simply doubled, this would very easily cover the small cost of fuel used by the entire population. Issue free-of-cost fuel coupons to every Kuwaiti citizen which could be redeemed at any petrol station in lieu of paying in cash. The number of monthly fuel coupons would be limited per person, perhaps 500 litres each, and any coupons which were not used by the person could be taken to the local petrol station and exchanged for cash. This would allow every citizen to benefit directly from the vast oil reserves as they can decide to either fill up their vehicles for free or they can turn the unused fuel coupons in to cash. Registered children also qualify for the monthly fuel allowance as larger families require more fuel.

Posted by: hani husssien

All subsidies should be removed from everyone including Kuwaiti's. Live within your means and stop expecting handouts

Posted by: Expat

Some of the people think expats are a burden on the economy, which shows their poor insight into building the future of Kuwait. I would really like Kuwait to analyse costs and benefits of burdening expats with such discriminatory charges.

Expats pay millions of KDs for their residency, health insurance etc and are taking general subsidies as discussed in the article. Kuwaitis on other hand are not only utilizing these subsidies in addition are being paid by the Government on individual levels, which brings a real burden to their budget and expats are blamed (i agree, it is Citizens right to get benefit from Country).

If subsidies are lift then definitely salaries would increase by that margin. Kuwaitis cannot afford to loose expats, since expats work for them.

I do love Kuwait as home country and i hope that the leadership works toward making Kuwait something into what UAE has become.

Posted by: Concerned Expatriate

In this case, it is better not to employ any expatriates in Kuwait. Expatriates apart from earning money for their hard work are also part of the country's development. If this discrimination between expatriates and locals are to be considered, better let the local work in their own country and expell all the expatriates out. Expatriates can find job anywhere or even in their own country.,

Posted by: Jay

Another scam for Kuwaiti to rip us off with by charging us the rate but paying the government the Kuwaiti rate and the admin to run it fraught with issues
A badly thought out proposal why not raise fuel and drive cars off the road
This country is becoming an animal farm state

All comments are subject to approval before appearing

Further reading

Features & Analysis
How Kuwait is oiling the wheels of national reform

How Kuwait is oiling the wheels of national reform

Kuwait has for years sat on the sidelines while its neighbours...

Saudi currency devaluation would carry major political risk

Saudi currency devaluation would carry major political risk

Currency traders have been betting against the Saudi peg, and...

New global oil deal could draw lessons from 1998

New global oil deal could draw lessons from 1998

With oil prices touching their lowest level since 2003, OPEC...

Most Discussed
  • 4
    Finding Mr Pink

    Mr. Pink is quite possibly the rudest person I have ever met in my life. He says be humble...truly a lie for his own personal financial gain. Spend one... more

    Wednesday, 10 February 2016 3:30 PM - Jim
  • 2
    Rising from the ashes: The UAE's insolvency dilemma

    Arcapita Bank B.S.C.(c) entered bankruptcy in the US and in the Cayman Islands with the stated hope of restructuring. It was not able to restructure.... more

    Wednesday, 10 February 2016 8:13 AM - Tally M. Wiener
  • 1
    Dubai's ailing Falcon City of Wonders to get $2bn kick-start

    This is the difference between real property developers.
    one delivers to (most) of their promises and others use blaming others as an excuse for not... more

    Wednesday, 10 February 2016 10:18 AM - khalid
sponsoredTracking