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Kuwait plans heavy increase in electricity bills

A draft law, if approved may see bills for heavy consumers of electricity grow by as much as seven-and-a-half times that of present. The law has been submitted to the Parliament’s Financial and Economic Affairs Committee following approval by the country’s cabinet.

The cost of electricity in Kuwait is 2 fils per kilowatt-hour. The draft bill proposes increasing prices between 5 fils and 15 fils for villas and apartments, depending on consumption levels.

A Kuwaiti member of Parliament (MP) says that the committee may seek to reduce the government’s proposed charges, including the bid to keep the current rate at 2 fils unchanged for households which consume little electricity.

The Committee may be held on 6th May to consider the bill, and the proposed move is just the latest step in a series of economic reforms, which include petrol, utilities, taxes and fees, which are being considered by each of the GCC nations as the low oil price places pressure on public finances.

Early this month, the cabinet in Kuwait has approved economic reforms, including introduction of 10 percent tax on corporate profits to narrow the country’s budget deficit.

Earlier, officials said they were considering reduction of subsidies, but the issue is politically sensitive and may have a direct impact on living standards of Kuwaitis. The subsidies cost the government billion dollars annually.

The Finance Ministry reveals that due to low oil prices in January, the government may run a deficit of 12.2bn dinars in the fiscal year, beginning 1st April, which is 50 percent higher than that estimated for the current year, following government contributions to the sovereign wealth fund.

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