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'Subsidies on basic staples won't be lifted'

Manama, December 23, 2013

Government subsidies in Bahrain on basic commodities, including meat, will not be removed, reassured a top official.

Minister of State for Information Affairs Sameera Rajab yesterday dismissed reports in local newspapers, citing unnamed sources, that plans were underway to compensate Bahraini households with monthly allowances after removing the subsidies, said a report in the Gulf Daily News (GDN), our sister publication.

It follows an increase made to the price of diesel for domestic consumption, which will almost double in three years - up from 100 fils (26 cents) at present.

The National Oil and Gas Authority announced last Thursday that diesel would be sold at 180 fils per litre from January 1, 2017.

However, Rajab said prices will still be one of the lowest worldwide, despite the spike. "The government is trying to protect natural resources from exploitation and as everyone knows diesel is being smuggled in huge quantities over the years, causing losses in millions because it is sold at subsidised rates, while the public don't use it as a fuel," she said.

"So we are increasing the cost by 20 fils per year. It's a slight change that wouldn't affect anyone, except those dealing with it in the black market, since it wouldn't make a difference for major companies.

"But the issue has been exaggerated by some in the local press with anonymous government sources being quoted saying that there were plans to remove subsidies from basic commodities - something that is not even considered by the government and is not on its agenda.

"Some are building news on speculation from the increase to diesel prices and it is unfortunate that MPs are compiling a case out of it."

She was speaking during a press conference following yesterday's weekly Cabinet session at Gudaibiya Palace.

Under a gradual four-phased plan, domestic consumers will pay 120 fils per litre from January 15 next year - up by 20 fils. The price will increase by another 20 fils to reach 140 fils with effect from January 1, 2015.

Impact

A year later consumers will pay 160 fils per litre - with the new price taking effect on January 1, 2016. By January 1, 2017, consumers will be paying 180 fils per litre.

MPs are planning to dedicate time to the issue during parliament's session tomorrow, saying that the diesel increase will have negative impact on the local market.

Meanwhile, Bahraini fishermen will be able to buy diesel at 30 fils less than the readjusted prices - 90 fils (2014), 110 fils (2015), 130 fils (2016) and 150 fils (2017).

Bahrain Petroleum Company (Bapco) has been assigned to regulate diesel sales to fishermen from January 15. - TradeArabia News Service




Tags: Meat | diesel | Subsidies |

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