Bahrain to cut subsidies for expats as oil begins to bite

Bahraini citizens will receive cash payments from the state to offset price rises when subsidies are removed, says minister.

Photo courtesy: Zen Icknow/Corbis Images
Dubai - The Gulf states of Bahrain and Oman have responded to low oil prices by cutting spending on subsidies, with Manama even moving to reduce state spending on its foreign population.
Bahraini citizens will receive cash payments from the state to offset price rises when subsidies are removed, Minister of State for Information Affairs Isa bin Abdulrahman Al Hammadi said. Foreign citizens would not receive such payments.
"The majority of beneficiaries from subsidy of consumer goods and services are foreign national residents in the kingdom and companies but not individual Bahraini citizens," the official Bahrain News Agency quoted him as saying late on Monday. The government will, therefore, redirect subsidy policies to benefit local citizens only, Al Hammadi said.
Like other oil exporting countries in the six-member Gulf Cooperation Council, Bahrain employs many foreign workers; about half of its population of roughly 1.3 million is estimated to be expatriate. They benefit from state subsidies which keep down prices of fuel, meat, electricity, water and other items.
Oman slashes spending on defence, subsidies
Oman's government will cut spending on defence and subsidies while continuing to invest in diversifying the economy, official figures showed on Tuesday.
The plunge of crude prices since last year has slashed the government's net oil revenues, which shrank 35 per cent from a year earlier to 1.67 billion rials ($4.35 billion) in the first quarter of this year, provisional finance ministry data showed.
Meanwhile, current spending on defence and national security dropped 25 per cent to 567.3 million rials. Spending on "participation and support", which includes subsidies, fell 48 per cent to 189 million rials; the government raised domestic natural gas prices on January 1.

• MENA