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The recent and unexpected rise of Gulf region economic reform has gathered pace with announcements on 11 January by Oman and Bahrain of increased prices for transport fuels. Qatar followed suit with a surprise 14 January announcement that gasoline prices would rise at midnight.
After years of maintaining astronomically high subsidy levels, collapsing oil revenues are forcing the Gulf Cooperation Council (GCC) countries to heed the urgings of the IMF. Reduced government spending on subsidies at a time when low crude oil prices are hitting exports revenues is aimed at minimizing budget deficits in 2016 (MEES, 8 January).
Nevertheless, there remains considerable scope for further price hikes, particularly with natural gas and electricity tariffs.
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