Fuel Price Hike in Kuwait 

I have been writing about love, dreams, mythology, next life etc etc. Views to posts were decent in the beginning with some of you even been darlings enough to like or comment on some of them. Now I have days and days and posts after posts without even a single view.

To repeat: views are recorded in statistics when you access the WordPress site. You don’t have to login and the views are totally anonymous and I won’t know who viewed and I get tremendously encouraged.

For liking, you may get the option on the message email itself or you may have to sign in. And I, only me, will know who liked it and love you for that.

Comments of course are most welcome and even others visiting can see them.

But if you read posts from the email, no statistics is recorded. I am continuing in the belief that you are reading but please consider to do more. Remember the social media mention of an equally egoistic friend who called people like me ‘Validation Whore’. I am one and love the validation.

Why am I writing these here when there’s a title to this post? Well I have decided to be private when writing on anything political or religious.

Let me put down my perspective about the fuel price rise in Kuwait.

It’s going up by over 50% from today. The rate of hike is shocking but not so alarming considering they are probably the lowest and the increase is on such low base.

Nations raise fuel prices for several reasons. For one it’s revenue collection. Some like India used it to reduce fuel consumption in addition to revenue. That’s reducing affordability. The overall target benefit is reduced imports of crude.

Kuwait is a major producer of crude. Reducing usage internally or worldwide may not be a target. Of course, internal prices are subsidized. Or are they? Perhaps not. It’s discounted compared to prices outside.

But what will be the effect? Of all items, energy has the most profound impact on a spiraling prices theory. We can imagine an ‘across the board’ hike in prices. Amounting to inflation, but with a difference. Inflation usually results in a wage hike. While this may accelerate inflation, the marginal or as in the case of Kuwait, the low income population is supported.

What are the chances of a wage hike in Kuwait. Zilch…

So the low income section or the migrants are affected. Many of them may sell their vehicles and look for public transport. The current habit of going for a stroll in the car may reduce. Roads may become less crowded. Government may not extract the projected additional revenue with the hike.

And if the price rise elsewhere is not controlled effectively, consumers will suffer disproportionately to the rate of fuel hike.

Business may reap the benefits. High income section may enjoy less traffic jams. Oil surplus will increase and whether this is good or bad depends on if oil is a viable long term reserve. Here I am talking about alternate cheap sources evolving and the urge towards green fuel even at a dollar cost.

Perhaps a better option would have been charging the hitherto, mostly free water and electricity. This, in addition to revenue would result in conservation of scarce resources. People will be forced to switch off air conditioning when they travel out on long holidays. And lavish spraying of desalinated water for washing cars will be rare.

And worse, with fuel rise, we may see a reverse migration of workers going back with the wage arbitrage disappearing.

For the country this could be the one positive if unemployed nationals fill in the gaps…

Time will tell!!!

Fuel Price Hike in Kuwait 

2 thoughts on “Fuel Price Hike in Kuwait 

  1. I think reduced consumption in the wake of price rise is only short lived. People who are used to certain level of comfortable living return to the same old routine gradually, unless it is a war like situation or availability is scarce.

    Liked by 1 person

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