Kuwait’s government is looking at adjusting its petrol subsidies in order to reduce waste, a senior Kuwaiti official said on Monday in a fresh sign that authorities are using this year’s oil price plunge to push economic reforms.
For years, the government refrained from cutting lavish and growing energy subsidies because of political sensitivities. But last month, it said it planned to raise domestic prices of diesel fuel and kerosene.
Ali Sabt bin Sabt, acting undersecretary at Kuwait’s oil ministry, told Reuters on Monday that the government was now also looking at petrol subsidies. A petrol price hike would probably have a much bigger impact on consumers than the diesel and kerosene changes.
“You need to do something about subsidies. Maybe a producing country can turn into a consumer country,” Sabt said on the sidelines of an energy conference in Abu Dhabi, referring to concern that ultra-low domestic prices are encouraging Kuwait’s petrol consumption to balloon as its population grows, potentially eating into its oil exports.
“We need to put policy on it. We need to put an order to it so we can do something regarding consumption.”
Sabt added, “Yes, we are looking at petrol specifically. It is subsidised and…that is increasing. As population is more and more, we have to do something in this regard.”
Asked whether the government might double petrol prices in the future, he said: “Not doubling, but it is under study…It is not yet decided.”
A decision may come in the near future, Sabt said without elaborating.