KUWAIT CITY: Kuwait has raised the price at which it estimates oil revenues for budget purposes to $50 a barrel from the $36 used for the past two years, the finance minister said Thursday.
We have raised the price of oil to $50 a barrel in the budget for the fiscal year starting April 1, Mustafa al-Shammali told reporters.
Even so, and despite posting surpluses for the past eight straight years, the cabinet approved a draft budget this week that, as usual, projected a shortfall – this time of 5.1 billion dinars ($18.8 billion).
The oil-rich Gulf state has traditionally used an ultra-conservative price to calculate its oil income, which accounts for about 95 percent of total revenues, and has used the 36-dollar-figure for the past two fiscal years.
Revenues for 2008/2009 were estimated at 12.68 billion dinars ($46.4 billion), 52.8 percent higher than the 8.3 billion dinars projected for the current year.
Oil revenues were estimated at 11.65 billion dinars ($42.7 billion) – the largest ever and 56 percent more than the 7.45 billion dinars projected for the current year.
Oil income was calculated on the basis of a daily production of 2.2 million barrels per day (bpd), the same as the current year.
Kuwait, OPEC s fourth largest producer, is currently pumping 2.5 million bpd and is expected to maintain this output level over the next year.
Meanwhile, the budget projects spending at 17.8 billion dinars ($65.2 billion), up 57.5 percent on this year s estimates of 11.3 billion dinars.
Expenditures include 5.47 billion dinars ($20 billion) as a payment to the state-run pension agency to cover its deficit. The cabinet decided to pay a similar amount in 2009/2010.
The budget must be approved by parliament to become effective.
Kuwait has projected a deficit of 2.98 billion dinars (about 11 billion dollars) in the current fiscal year, but actual figures show the emirate is on track to post a record surplus on the back of high oil prices.
Figures on the finance ministry website show Kuwait posted income of 13.47 billion dinars ($49.3 billion) until the end of December, or the first nine months of the fiscal year.
Spending in the same period reached 5.1 billion dinars ($18.7 billion), leaving a massive provisional surplus of $30.6 billion.
This year would be Kuwait s ninth straight year of budget windfalls because of strong oil prices.
During the previous eight fiscal years it posted surpluses totaling around $72.5 billion. -AFP
