Manama: Expats and businesses will no longer receive the majority of government subsidies, it was confirmed yesterday. Bahrainis will continue to enjoy subsidies on electricity and water in their homes, as well as on essential home goods and foods.
However, subsidies on kerosene and petrol are set to be cut gradually – as previously announced by the government. Meanwhile, a decision is yet to be made on meat subsidies, with a special committee formed to study the matter further prior to its enactment in September.
A joint government-parliamentary committee meeting was held yesterday at parliament to decide the future of subsidies, chaired by MP Shaikh Majid Al Majid with the government delegation headed by Deputy Prime Minister and ministerial committee for financial affairs and rationalising spending chairman Shaikh Khalid bin Abdulla Al Khalifa. In a statement released by the committee, they stated that they agreed on the implementation of these initiatives in order to ensure that citizens are the only ones who benefit from government subsidies.
“The decision to review the current subsidies was in order to improve the country’s financial situation, which was hit as a direct result of the decrease in oil prices that no one had expected, which had originally been estimated at between $120 and $130,” said Shaikh Khalid. “At a time when the government is striving to co-operate and co-ordinate with the executive branch to try and improve the financial situation of the state, it is also keen not to affect the gains citizens had previously in any way or influence them directly as a result of implementing these initiatives.
“So we emphasise that the upcoming steps will focus on providing subsidies for citizens only, in order to safeguard public money from waste as a result of borrowing, in order to finance both individuals and companies alike as is happening now. “These procedures will take into account preserving the competitive edge that has long defined Bahrain in the region, for both foreign and domestic investment. “They will also take into account promoting economic development in tourism, logistics and business, while strengthening ties between the public and private section to help provide job opportunities for citizens.
Legislation
“In addition, they will improve legislation and laws to improve investment and the principle of importing the cost of public services.
“In light of the current financial situation, it does not add up to continue spending as in times of prosperity.
“As a result, the government has started to adopt internal initiatives to reduce spending, the latest example of which was reducing the number of participants at foreign seminars, conferences and meetings to those that must be attended, while for others the relevant ambassador of Bahrain in the country can represent us at the event.”
Shaikh Khalid added that substantial proposals put forth by MPs will also be taken into account when drawing up the fiscal budget for 2017-2018.
Energy Minister Dr Abdulhussein Mirza, accompanied by a technical team, gave a presentation at the meeting regarding energy needs, including electricity, water, kerosene, natural gas and diesel.
Dr Mirza stressed the importance of adopting a balanced policy for pricing natural gas in order to enhance economic stability, promote the sustainability of investments in the industrial sector and give enough time for companies to amend their situation in order to spare any surprise losses and avoid the erosion of market value.
“The National Oil and Gas Authority has completed a study in collaboration with one of the world’s leading investment companies to develop a pricing policy for natural gas in Bahrain,” he said.
“It recommended a plan to start amending the natural gas price gradually during a transition period, so that in subsequent years the application of an equation price reflects the cost of natural gas production or import.”
The committee agreed to continue to provide subsidies on electricity and water to citizens’ homes, the allocated amount being set at BD650 million distributed evenly over this year and the next.
“However, subsidies for diesel and kerosene will begin to be withdrawn from the general public, except to fishermen and traditional bakeries, as the nature of their work directly affects citizens,” the statement added.
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