Kuwait government denies plans to phase out subsidies by 2020

Kuwait’s finance ministry has denied plans it is seeking to end public subsidies on water, electricity, fuel and other areas by 2020 following reports earlier in the week.

Al-Qabas newspaper cited a report published by the finance ministry as saying all public subsidies were being reviewed with plans to gradually phase them out by 2020.

However, the finance ministry denied this in a tweet yesterday, according to Kuwait Times.

Public subsidies and fiscal aid are estimated to cost the country $3bn in the current fiscal budget, or about 5 per cent of projected spending.

The government has already enacted cuts to subsidies to kerosene and diesel and partially lifted subsidies on fuel, raising prices by more than 80 per cent in some cases.

Read: Kuwait approves 83% petrol price increase

However, the move attracted strong opposition from MPs who protested that the finances of citizens would be affected.

An eventual deal granting each Kuwaiti driver 75 litres of free petrol each month was not enough to prevent disputes between the government and parliament and led to the latter’s dismissal by the Emir last month.

New elections will be held on November 26.

Read: Kuwait to hold parliamentary elections next month

Kuwait has weathered low oil prices better than some of its Gulf peers but still posted a $15.3bn budget deficit for the financial year ending March 31.

A deficit of $29bn is projected for the current year, which began on April 1.