KUWAIT: MP Faisal Al-Kundari yesterday warned that the drop of oil prices below $20 a barrel is a catastrophe and urged the government to propose alternative measures to diversify sources of income which heavily depend on oil.
Kundari also called on the government to submit its vision for the present and the future in the face of low oil prices, adding that Kuwait’s dependence on oil as the only source of income poses a serious risk for economic collapse.
He warned that Kuwaiti fiscal reserves are not enough to support public spending if oil prices continue to fall in the current pace.
Kuwait Petroleum Corp. said yesterday the price of Kuwaiti oil plunged to $20.20 on Monday, the lowest level in 13 years. Brent and WTI crudes prices rallied slightly to around $30 a barrel a day after dropping below $29 a barrel.
The fall came as global and Gulf stock markets were routed with continuous losses since the start of the year. Gulf bourses however made a comeback yesterday with Qatar rebounding 5.5 percent and Saudi Arabia gaining 4.1 percent.
Kundari said that contingency plans must be devised and implemented within well-defined periods in order to face the consequences of the price collapse.
All Gulf states except Kuwait have cut energy subsidies in a bid to boost non-oil revenues. But the government plans to meet with MPs to brief them about plans to cut subsidies on commodities and services including petrol, electricity and water.
No time has been fixed for the proposed meeting between ministers and MPs to discuss the issue.
KPC quickly denied statements attributed to its CEO Nezar Al-Adasani in Abu Dhabi that the government was likely to raise petrol prices in the first quarter of this year.
KPC said Adasani was misquoted as he only referred to government plans to study cutting subsidies without providing specific dates.
MP Saadoun Hammad yesterday welcomed a decision by the Audit Bureau to reject the Airport expansion project because of the high cost, violations and failure to abide by conditions and specifications.
He said by this rejection, the Audit Bureau proved it is the supervisory arm of the national assembly and the defender of national interests.
Hammad said the Audit decision is a prove that his position to the project and the contract awarding process is correct. The lawmaker had repeatedly claimed that the value of the contract is KD. 600 million above estimates.
The contract was awarded in violation of procedures to a particular company for KD. 1.32 billion, Hammad said.
The lawmaker called on new Public Works Minister Ali Al-Omair to take to account all officials involved in the violations of awarding the controversial contract.