Fuel subsidies will continue
to soar: Bahrain oil minister

MANAMA — A top official has urged fuel prices to be reconsidered “immediately” amid skyrocketing government subsidies.

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Published: Mon 22 Nov 2010, 11:03 PM

Last updated: Mon 6 Apr 2015, 11:32 AM

“Fuel subsidies will continue to soar, exceeding their present level of $500 million per annum”, Oil and Gas Affairs Minister and National Oil and Gas Authority chairman Dr Abdulhussain bin Ali Mirza told the press on Saturday.

The Government subsidies for natural gas are not included in the massive overall fuel subsidies. According to Dr Mirza, companies, well-offs and non-Bahrainis are benefiting from fuel subsidies, hence the need to rethink the current trends and adopt readjusted “fair prices”.

“Adopting fair prices would be crucial in optimising the use of these products and prevent any smuggling which benefits certain individuals”, Dr Mirza said.

He suggested redirecting fuel subsidies to finance development projects benefiting citizens, particularly housing schemes. According to the minister, the prices of certain oil byproducts in the local market date back to 1983, although the prices of raw petrol increased more than tenfold. The cost of production has since then kept increasing tangibly. “Despite the changing global trends, the Government chose not to reconsider the prices for sake of citizens”, he said. “This means government subsidies have been increasing since then, benefiting increasing numbers of non-Bahrainis as foreign workers continue to multiply”.

Dr Mirza pointed out the massive investments pumped by the government to ensure high-quality oil-byproducts — particularly unleaded petrol and low-sulphur diesel.

“Contrary to other neighbouring GCC countries, Bahrain does not have reserves of raw petrol and natural gas”, Dr Mirza said. Bahrain is thus forced to import raw petrol from neighbouring Saudi Arabia, based on benchmark prices in the global oil markets. According to the minister, subsidised fuel has encouraged misbehaviors and wrong practices among customers.

“Some customers are using “mumatz” although “Jayyid” is more appropriate for their cars”, he said. “No wonder the consumption of “Mumtaz”, exceeds the consumption of “Jayyid” by far”. He added. He also pointed out other wrong practices plaguing the local market, particularly “unjustified overconsumption” and diesel smuggling.


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