The Kuwaiti Cabinet on Monday decided to raise gasoline prices by more than 80% from September 1 as part of economic reforms aimed at countering falling oil revenues.
A statement after the weekly cabinet meeting said the price of low octane gasoline will rise by 41% to 28 cents a liter while high grade gasoline will increase by 61% to 35 cents, AFP reported.
It also decided to raise the price of environmentally friendly low-emission "ultra" gasoline by 83% to 55 cents a liter.
These are the first increases in heavily subsidized gasoline prices in the OPEC member for almost two decades. The oil-rich Persian Gulf state liberalized the prices of diesel and kerosene in January 2015 and revises their prices monthly.
Kuwait is the last country among the energy-rich (Persian) Gulf Cooperation Council states to increase the price of gasoline.
Other (P)GCC members—Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates—have either completely liberalized fuel prices or raised them substantially because of the sharp fall in oil income since mid-2014.
The Kuwaiti cabinet said a government committee will revise the new gasoline prices every three months depending on international oil prices.
In April, parliament approved a government-sponsored bill to raise electricity and water prices paid by foreign residents and businesses, but exempted citizens. This increase, the first in almost 50 years, will take effect from September next year.
Kuwait has posted a budget deficit of $18.3 billion in the past fiscal year, according to provisional figures, following 16 years of windfall due to high oil prices.
It is projecting a deficit of $29 billion in the current 2016/2017 fiscal year. The emirate is home to 1.3 million native citizens and around 3 million foreigners.
Kuwait is also taking steps to reduce the economy’s reliance on oil, a goal shared by major crude exporters including neighboring Saudi Arabia. The measures include introducing corporate taxes and merging state entities to downsize the government.
Non-oil revenue will reach 1.6 billion dinars, or 15% of total revenues, in the fiscal year which started in April, according to government estimates.