Kuwait MPs fight back against govt price rise plans

 19 Feb 2017 - 19:40

Kuwait MPs fight back against govt price rise plans
FILE PHOTO: Kuwaiti Electricity Water Minister Ahmad al-Jassar speaks as Oil Finance Minister Anas al-Saleh looks on during a session at the national assembly in Kuwait City on April 13, 2016 (AFP / YASSER AL-ZAYYAT)

AFP

Kuwait City: A parliamentary panel in Kuwait on Sunday approved draft legislation calling for the scrapping of government plans to raise petrol and power prices to combat a budget deficit.

The financial and economic affairs committee said in its decision that "no increases in public charges and commodity prices" can be applied without a law being passed in parliament, its secretary Safa al-Hashem told reporters.

The decision will now go before the Gulf state's parliament for a vote that is expected to pass because a majority of lawmakers supports preventing the government from raising such charges.

Under Kuwaiti law, the government has the power to reject parliamentary decisions -- but MPs can also override such a rejection by a two-thirds majority in a fresh vote.

In a series of measures aimed at financing a budget shortfall resulting from low oil prices, the government increased fuel prices and also plans to apply sharp rises in power and water prices in May.

Kuwait, which relies heavily on oil income, posted its first budget deficit of $15 billion in the 2015-2016 fiscal year after 16 years of healthy surpluses.

It expects a higher deficit in the year ending March 31, and has also projected a shortfall for the next fiscal year.

Austerity measures were implemented in the other five Gulf Cooperation Council members -- Bahrain, Oman, Qatar, Saudi Arabia and United Arab Emirates -- with no problems.

Kuwait is the only Gulf state to have a vibrant parliament in which the opposition controls half of its 50 seats following a general election in November.

The International Monetary Fund urged Kuwait that month to enact further subsidy reforms to trim its budget deficit, despite their political sensitivity.

Kuwait has already drawn down billions of dollars from its $600-billion sovereign fund and resorted to borrowing and plans to issue domestic and foreign bonds worth $16.6 billion.