Kuwait Finance Minister: Oil Price Fall Won’t Slow Development Projects

The plunge in oil prices in the past six months won’t affect Kuwait’s economic development projects and the governmenht will continue to support capital expenditure in the economy, Finance Minister Anas al-Saleh said on Sunday.

Saleh and other ministers were speaking at a news conference to explain the government’s fiscal policy and reforms to its lavish system of consumer subsidies.

On Jan. 1, the government moved to cut its subsidy burden by raising the price of diesel at wholesalers and fuel stations to 0.170 dinar (59 U.S. cents) per litre from 0.055 dinar.

The politically sensitive decision prompted heavy criticism of government policy by some members of parliament, who argued that the drop in oil prices should lead to lower, not higher, prices for consumers.

Ministers insisted on Sunday that they would not abandon subsidy reform, but Saleh also said the government might make 0.170 dinar per litre – still cheap by international standards – a ceiling for diesel.

Oil Minister Ali al-Omair said the government had decided to postpone any removal of subsidies from petrol, electricity and water. He did not say when authorities might resume considering the reforms.