Oil-rich Kuwait tripled the prices of diesel and kerosene on Wednesday, ending decades of heavy subsidies, while putting off a similar decision on electricity and water charges.
Planning Minister Hind al-Sabeeh said a joint meeting of the cabinet and higher planning council decided to hike the prices of diesel and kerosene to 170 fils (59 cents) a litre from 55 fils (19 cents).
Very few consumers in Kuwait use diesel or kerosene and instead prefer petrol whose price of about 22 cents a litre has been kept unchanged.
Sabeeh, who was cited by the official KUNA news agency, said the meeting also ended subsidies on aviation fuel for foreign carriers that make fewer than 5,000 flights a year into Kuwait.
The cabinet decided in May to end subsidies on diesel in principle and ordered a committee to study the impact of the move on consumers before its implementation.
Sabeeh said that at the latest meeting charges were also reviewed for heavily-subsidised electricity and water, but that further studies had been ordered into the issue before any decision is made.
Kuwait last year set up a special committee to revise various state subsidies offered under a very generous welfare system and costing an estimated $18 billion annually, or more than 20 percent of the budget.
In April, the OPEC member’s government warned that spending outpaced revenues and that this could lead to a budget deficit in 2017-2018 after years of surpluses.
Oil Minister Ali al-Omair said ending subsidies on diesel would save about $1 billion each year.
The move comes as the price of oil, which contributes around 94 percent of Kuwait’s revenues, shed more than 20 percent since June alone.
Even before the decline, Finance Minister Anas al-Saleh warned in April that if oil prices remained at about $100 a barrel, Kuwait would post an estimated budget deficit of $2.3 billion in 2017-2018.
Kuwait has boasted a budget surplus in each of the past 15 fiscal years, helping to increase its sovereign wealth fund to more than $500 billion, according to unofficial estimates.