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Several activists describe fuel subsidy of 75 liters as improper
October 8, 2016, 8:19 am

Several political activists criticized what they regard as the government’s attempt to please citizens with monthly fuel subsidy of 75 liters, describing the move as improper since the compensation does not exceed KD 7 and it would have been better if the government either stood firm by its decision or cancelled it without giving such value of compensation to citizens.

Speaking to the daily, politicians accused the Parliament members of partnering with the government in burdening citizens, especially those with limited income. Political columnist Saud Al- Samaka considers the compensation humorous; arguing that if the government was convinced with its decision to increase fuel prices, it would not have succumbed to parliamentary pressure.

He affirmed the government loses its credibility through frequent withdrawal of its decisions as it did in the past with the labor strike in the oil sector. He pointed out the recent stance of the government proves it does not run the economy professionally, as it was supposed to form a committee to study and follow up the increase of fuel prices or fees for services.

He said the government “pampers” citizens in everything and now it is trying to issue impromptu decisions without conducting proper studies. He asserted this shakes the government’s confidence, while it did not consult other concerned authorities before implementing the fuel price hike decision.

Meanwhile, Attorney Fawaz Al-Shallahi thinks the complication arises in the fact that the people of Kuwait are used to the government’s habit of retracting its decisions, made worse by its move to rectify the mistake regarding fuel price increase through a bigger mistake.

He explained the government is clearly on the course of blunders — a manifestation of the incompetence of its advisors who lack the ability to present precise and feasible ideas.

On the other hand, Director of the Arabian Gulf Information and Documentation Centre in Kuwait Dr Ibrahim Al Shukri supports the 75 liters fuel subsidy because it will benefit citizens with low income. He stressed that cooperation between the State and citizens is a positive development, especially when the nation is facing a crisis related to resources.

Moreover, Chairperson of the parliamentary Committee for Appraising the Parliament’s Performance Faisal Al-Harbi considers the compensation humiliating as it appears that citizens will be waiting for one “jerricane of fuel” every month.

This clearly shows the government continues to make mistakes with the help of the Parliament. Citizens are suffering due to this government and this Parliament that always dances to the beat played by the former, he added.

In the meantime, Fixing global price of fuel (benzene) linked with the price of oil per barrel requires complex calculations that include costs for refinery, transportation and storage, reports Al- Rai daily quoting high-ranking sources from the oil sector.

The sources gave an example of liberating fuel price from subsidies to correspond with the global price: If the price of oil per barrel is $46, it means the price of unleaded premium gas 91 RON will be KD 0.120 per liter, unleaded super gas 95 RON will be KD 0.130 per liter and ultra gas 98 RON will be KD 0.140 per liter.

Sources explained such pricing needs three months to come up with a formula through various indexes with the price of oil per barrel; affirming a margin of subsidies on fuel continues to exist in Kuwait, between KD 0.025 to KD 0.035 for two types of benzene — unleaded premium and super. Meanwhile, official sources pointed out “the government has no short, medium or long-term plans to liberate fuel prices”, explaining that “fuel subsidy will continue based on periodic review by the Subsidies Committee.” Sources added, “The fuel price review mechanism will allow a suitable margin of up and down movement of global price of fuel monthly — the system implemented by producers of diesel and kerosene”.

Sources revealed the government “rejected demands for granting 75 liters of fuel to citizens monthly through the distribution of coupons as it might lead to the establishment of a parallel fuel market (black market), although some parliamentarians insisted on allowing citizens to do whatever they want with their fuel subsidy.”

However, the government’s concerns weighed more than that of parliamentarians; thus, the government suggested linking the monthly fuel support for citizens with their civil IDs such that beneficiaries will receive their fuel subsidy only if they present their civil IDs and no one will be allowed to receive the subsidy on their behalf.

So far, the monthly cost of fuel subsidy for citizens according to the current fuel price is about KD 6.5 (75 liters), equal to about KD 3.6 million per month or KD 44 million annually based on the current number of driving license holders among the citizens — around 563,000 individuals.

Source: Arab Times

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