Kuwait Subsidy Cuts

Kuwait plans to triple domestic diesel and kerosene prices and restrict the use of subsidized jet fuel to airlines with more than 5,000 flights a year. Announcing the decision on 15 October, Planning Minister Hind al-Subaih told state news agency KUNA that the cabinet had approved the findings of a review of subsidies prepared by the Ministry of Electricity and Water. This will raise the price of both diesel and kerosene by 209% from KD0.055 ($0.19)/liter to KD0.17 ($0.59)/liter.

Ms Subaih did not state when the decision would come into effect, but that a follow-up committee “will examine the repercussions of the decision and deal with its implications.” While the decision to go ahead with the reduction in subsidies for the two products is a positive step, implementation of the decision could be politically difficult.


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