Bahrain, Oman cut gas subsidies as oil hits 12-year low

By Reem Khalifa and Aya Batrawy, Associated Press | Posted - Jan. 12, 2016 at 5:50 a.m.



This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

MANAMA, Bahrain (AP) — Bahrain and Oman are reducing government subsidies on gasoline, becoming the latest Gulf Arab countries to try to cut back on spending and offset the effect of oil prices, which have fallen to their lowest level since 2003.

On Tuesday, gas prices at the pump rose by up to 60 percent in Bahrain, climbing to $1.25 per gallon (125 fils per liter) for regular gasoline and $1.60 per gallon (165 fils per liter) for premium fuel. Hundreds of people lined up at gas stations a day earlier to fill their cars before the higher prices went into effect.

The tiny island-nation in the Persian Gulf ended subsidies on meat and poultry in October, increasing consumer prices between three and four-fold. Bahrain plans to make further cuts in electricity and water subsidies in March.

Meanwhile, Oman said it would reduce gasoline subsidies starting Friday, with prices set to rise by 33 percent for premium fuel and 23 percent for regular fuel.

The moves come as crude prices closed Monday at $31.41 a barrel on the New York Mercantile Exchange — the lowest in 12 years.

The dip in global oil prices has cut into the revenues of oil-exporting countries, including many Gulf Arab states where citizens have become accustomed to generous government subsidies and state handouts.

To reduce their growing budget deficits, the United Arab Emirates and Saudi Arabia reduced fuel subsidies last year. Kuwait's parliament said Tuesday that it, too, is planning to study subsidy reform.

___

Batrawy reported from Dubai, United Arab Emirates.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reem Khalifa
    Aya Batrawy

      SIGN UP FOR THE KSL.COM NEWSLETTER

      Catch up on the top news and features from KSL.com, sent weekly.
      By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

      KSL Weather Forecast