Kuwait gives in to pay rise demands from oil union

Kuwait has reportedly given in to pressure from oil and gas workers by offering them a 7.5 per cent pay rise.

Local workers from the Oil and Petrochemical Industries Workers Confederation went on strike for three days in April over proposed cuts to their benefits.

Kuwait Times said that a ministerial committee entrusted to negotiate with the union had agreed to one of the group’s key demand when it went on strike – an annual raise under the same regulations as last year.

During a meeting until the early hours of the morning yesterday, both sides agreed to the 7.5 per cent annual raise and the offering of the option for retirees to choose between healthcare at a Kuwait Oil Company hospital or private health insurance.

The raise was reduced to 5 per cent for new recruits, according to the publication.

The union, which comprises workers at Kuwait Oil Company, Kuwait Oil Tanker Company, Equate Petrochemical Industries Company and Kuwait Gulf Oil Company, also said its other demands were being considered including the continuation of a company cars scheme and maintaining the same airfare rates for staff.

Kuwait Times reported last month that the country lost between $175m and $200m during the three-day strike by oil and gas workers.

Read: Kuwait lost up to $200m during oil strike

Official sources were quoted as saying the country’s oil production fell by as much as 60 per cent during the period and did not fully recover until three days after the strike ended.

The country’s ceding to the union’s demands will be a blow to plans to include up to 20,000 oil workers under its new public payroll system as low oil prices hit coffers.

Kuwait is expected to post a budget deficit of KD 12.2bn ($40.2bn) for 2016-2017, nearly 50 per cent higher than the previous year.

The country’s Finance Ministry said in January that revenues would only cover 71 per cent of state salaries and associated costs, estimated at KD 10.4bn.