Gasoline subsidy removal to save Bahrain BD56m annually

Gasoline subsidies were officially removed, starting from today, with a 60 per cent increase in price per litre.

The new prices of gasoline were announced yesterday, set to be sold for 160 fils/litre for the 95 Octane  (Mumtaz) and 125 fils/litre for the 91 Octane (Jayyid).

According to officials, the decision comes as part of the government’s efforts to cut public expenditures, in line with the continually dropping international oil prices.

The National Oil and Gas Authority (NOGA) announced in a statement issued yesterday: “As part of the Kingdom of Bahrain’s comprehensive economic and fiscal reform programme, the Cabinet today approved an amended price of gasoline sales. 

“The decision follows recommendations from the Executive Committee, as outlined in a memorandum submitted to the Cabinet by NOGA.” The new prices were announced in a press conference that followed the weekly Cabinet meeting at Gudaibiya Palace.

In the press conference, Energy Minister Dr Abdulhussain Mirza said that “the Cabinet’s decision forms part of the government’s wide-ranging programme of structural economic and fiscal reforms, which will further strengthen the country’s long-term development”.

“The decision would contribute to addressing current fiscal challenges faced by Bahrain, as a result of the unprecedented drop in global oil prices, which has seen the price of oil per barrel decline by over 60pc,” Mirza stated.

The minister stressed that “the action announced follows similar steps taken by Bahrain’s fellow GCC countries and that the amended gasoline price would be similar to prices in other GCC countries”.

He highlighted that gasoline prices in Bahrain had remained unchanged for 33 years and that “the amended price would promote efficient use of energy sources, have a positive impact on both the economy and the environment and contribute to the Kingdom’s long-term fiscal stability.” 

Dr Mirza also revealed that BD56 million out of the State’s debts would be saved annually following the amendment of the prices, adding that BD166m was spent on supporting gasoline in 2014.

Speaking at the conference was also Parliament and Information Affairs Minister Isa bin Abdulrahman Al Hammadi, who called upon the public to “realise the importance of the exceptional stage that the country and the region is going through”.

Al Hammadi called for unity to combat the financial challenges that are a result of the dropping oil prices, which have direct impacts on the State’s budget.

He  reiterated the government’s keenness on achieving sustainable financial stability for citizens by implementing a set of procedures to reduce expenditures and increase incomes, stressing that “the government’s decisions come after intensified studying to balance the country’s reality and ambitions.”