By Staff writer
Kingdom wants to minimise shock of subsidy removal as it seeks to plug $4bn budget deficit
Subsidies on electricity bills will be lifted over a period of four years to minimise the economic impact on consumers, Bahrain’s energy minister has announced.
Bahrain has approved plans to cut subsidies for domestic energy and water as part of measures taken to help plug an estimated $4 billion budget deficit for 2016.
It already axed subsidies for meat and gasoline at the end of last year, but analysts have warned that the country must seek to phase in subsidy cuts to reduce the economic shock on consumers and companies.
According to Gulf Daily News, energy minister Abdulhussain Mirza has said the latest round of subsidy cuts – on domestic electricity and water prices – would be implemented gradually over the next four years.
“The government is keen on gradual implementation of the new prices to avert any negative impact on consumers and the national economy,” Mirza was quoted as saying.
The prices of non-domestic energy and water prices were readjusted in 2013 as a first step before expanding the measure to include all consumers.
Meanwhile, finance minister Sheikh Ahmed bin Mohammed Al Khalifa has said Bahrain’s austerity measures are in line with the International Monetary Fund (IMF)’s latest country recommendations.
“Bahrain's Government Action Plan, currently underway, includes wide-ranging measures that will ensure the sustainability of Bahrain's financial resources and development, benefiting the entire country," Al Khalifa said in a statement carried by state news agency BNA.