Economic reforms initiative aims at countering falling oil revenues.
The Kuwaiti cabinet on Monday decided to raise petrol prices by more than 80 percent from Sept. 1 as part of economic reforms aimed at countering falling oil revenues.
A statement after the weekly cabinet meeting said the price of low octane petrol would rise by 41 percent to 28 U.S. cents a liter while high-grade petrol would increase by 61 percent to 35 cents. It also decided to raise the price of environmentally friendly low-emission “ultra” petrol by 83 percent to 55 cents a liter.
These are the first increases in heavily subsidized petrol prices in the OPEC member for almost two decades. The oil-rich Gulf state liberalized the prices of diesel and kerosene in January 2015 and revises their prices monthly.
Kuwait is the last country among the energy-rich Gulf Cooperation Council states to increase the price of petrol. Other GCC members—Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates—have either completely liberalized fuel prices or raised them substantially because of the sharp fall in oil income since mid-2014.
The Kuwaiti cabinet said a government committee would revise the new petrol prices every three months depending on international oil prices.
In April, parliament approved a government-sponsored bill to raise electricity and water prices paid by foreign residents and businesses, but exempted citizens. This increase, the first in almost 50 years, will take effect from September next year.
Kuwait has posted a budget deficit of $18.3 billion in the past fiscal year, according to provisional figures, following 16 years of windfall due to high oil prices. It is projecting a deficit of $29 billion in the current 2016/2017 fiscal year.
The emirate is home to 1.3 million native citizens and around 3.0 million foreigners.