Kuwait’s recent fuel price reforms will help lower the state’s current expenditure and strengthen its government finances affected by low oil prices, according to a report by financial firm Moody’s.
Part of the fuel reforms, which will go into effect on September 1, will include an 83 percent rise in the price of premium petrol and a 42 percent rise in the price of lower-quality octane-91 petrol.
About 80 percent of Kuwait’s government revenues are dependent on oil and gas. However, the number had dropped to 70 percent in 2015 due to low oil prices. This makes Kuwait more vulnerable to oil price drops than its regional neighbours, according to the report revealed by Kuwait Times.
The report also showed that in 2015, total revenues dropped by around 41 percent and are expected to decrease another 14 percent this year.
In the same year, Kuwait’s total spending declined 16.5 percent, but is estimated to rise 1.8 percent in 2016.
The decision to raise fuel prices comes after Kuwait’s Cabinet raised the price of diesel and kerosene from $0.18 per litre to $0.56 per litre. Following public outrage, it reviewed the prices and decreased them by 35 percent to $0.36 per litre just a month later.
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