Bahrain to scrap asphalt subsidies
Manama, December 11, 2013
The Bahrain government's subsidies on asphalt are to be scrapped.
The price will be deregulated as of January 1 for lack of economic viability, the National Oil and Gas Authority announced yesterday, said a report in the Gulf Daily News (GDN), our sister publication.
The price trends in world markets will be used as benchmarks to fix the cost of locally-sold asphalt.
The Cabinet decided last Sunday in its weekly regular session to unsubsidise asphalt.
"Accumulated asphalt subsidies have cost the public budget $68 million from 2009 until last October," said Finance Minister and Minister in charge of Oil and Gas Affairs Shaikh Ahmed bin Mohammed Al Khalifa.
Asphalt has been sold locally at half-price since 2010, compared with the real pricing benchmarks in global markets.
A metric tonne of asphalt currently costs customers BD77 ($203) and new ones BD103, compared with BD207 in global markets.
Road construction firms and manufacturing companies are the main buyers of asphalt in Bahrain, in addition to those specialised in insulation products.
Overall subsidies cost the public budget BD1.126 billion at the end of last year. Updated figures show subsidies of oil and by-products soaring to BD288 million over the same period. - TradeArabia News Service