Raising Fuel Prices Will Help Improve Economy - Experts

The Cabinet's recent decision to raise diverse types of fuel prices, particularly the benzene, has the greatest significance in positively impacting the country's economy, experts said on Tuesday. The Government's economic reform plan will eventually help diversify the country's resources and release its reliance on a single source of income. Head of Kuwait National Competitiveness Committee Dr. Fahad Al-Rashid said that this decision is considered a step forward to improve the country's budget deficit and encourage austerity to face economic challenges.

Raising gas prices will reduce individuals' high unconscious consumption of fuel; this consumption is rated the highest in the world, he pointed out. Meanwhile, Kuwait Accountants and Auditors Association chairman Ahmad Faris described the raise in gas prices as "acceptable" in comparison to that in the GCC and Arab countries. He added that the positive side of the Cabinet decision is that gas prices will be reviewed every three months, reassuring that this raise will not be "permanent but changeable" in accordance to the fluctuations of oil prices.

"It's a quick fix," and a "precautionary measure" to improve the economy, Faris pointed out, hoping that the Government would not rely on short-term solutions but rather utilize other investment tools to strengthen the country's financial situation. Yesterday, The Cabinet approved recommendations presented by the economic affairs committee with respect of a proposal by the committee charged with revising various kinds of State subsidies, on setting fuel prices.

It approved the commission recommendation and decided to begin "rationalizing subsidies for benzene in the country, as part of the Government reform scheme where the fuel products' prices will be restructured to be in harmony with the average rates in the other GCC states. "The new pricing policy will be in effect as of 1-9-2016 in line with the policies adopted in the GCC countries." The news prices are as following: Octane-91: 85 fils per liter, Octane-95: 105 fpl, Ultra-Premium: 165 fpl. The new prices have been set after examining global rates.

Kuwait is the last GCC State to embark on "restructuring the fuel prices," however the new ones remain the lowest among the Council countries, as well as globally. Moreover, the Cabinet has tasked a special commission to re-examine the State subsidies and the fuel prices every three months, to be in harmony with the global rates.

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