Petrol prices are most likely to be increased before the end of May as part of a series of steps and measures to be made to avoid reducing Kuwait’s sovereign rating, wellinformed sources said. Increasing gasoline prices is a practical solution so that the government could avoid downgrading, especially since hiking petrol prices do not need a special law like electricity prices, the sources added.
Further, the sources said that the parliament would discuss the government’s bill on electricity and the amendments suggested by the parliamentary financial and economic affairs committee on Tuesday pending passing it as soon as possible to be put into practice one year later.
Moreover, the sources added that increasing petrol prices simultaneously with those of electricity would confirm that Kuwait had already started actual economic reforms through reducing the cost of subsidies, especially since fuel subsidies alone have been costing the state budget around KD 1 million a year (71 percent of total subsidies).
The sources added that according to international advisor Ernst & Young, reducing electricity subsidies and the finance ministry’s reform measures would help weaken Moody’s justifications to cut Kuwait credit rating.