By Staff writer
Cut in subsidies means firms need to cut costs as customers reduce spending levels
Members of the Bahrain Chamber of Commerce and Industry (BCCI) have warned private sector companies may be forced to close or reduce staffing levels as they feel the impact of the cut in energy subsidies, it was reported this week.
Former president of Bahrain Economic Society Dr Abdulla Sadiq told a BCCI panel this week that Bahraini families were now spending up to 30 percent on fuel as a result of the cut in subsidies.
As a result, some staff were asking for pay increases to compensate for the higher outlays. At the same time customers were spending more, forcing managers and company owners to consider reducing expenses or laying off staff to maintain margins.
“There will be many impacts such as staff asking for more salaries and high operation costs,” Sadiq was quoted as saying by Gulf Daily News.
“All we need is to cut down the fat,” businesswoman and Al Zayani Commercial Services president Afnan Al Zayani added.
“The private sector accounts for more Bahraini workforce in total than the public sector and they will be the one paying high bills now. If we start to feel the pinch then some establishments would close down or lay off staff which could increase social instability.”
The report said premium petrol in Bahrain rose by 60 percent.