Bahrain is removing its government subsidies on meat starting September 1, allowing the domestic prices to increase, BNA the state news agency reported as the kingdom’s government looked to save money as the low prices of oil started to pressure the budget.
Like other Gulf states that export oil Bahrain has for a number of years subsidized certain goods and services like water, electricity, fuel and meat, keeping the prices of these very low in an effort to maintain social peace.
Since the middle of 2014, the subsidies are increasingly more difficult to afford by the government as the price of oil has plunged, slashing revenues from exports.
Bahrain, with far smaller financial and oil reserves than other Gulf neighbors, has been hit hard.
Therefore, Bahrain has been looking at possible cuts in subsidies for meat, which could be followed by other similar moves for other types of goods and services.
However, citizens of Bahrain will receive compensation for higher prices of meats, the news agency quoted the Minister of Commerce Zayed bin Rashed Al Zayani as saying late Saturday.
Zayani didn’t say the amount the price of meat might increase or give details of what compensation the citizens would receive.
Officials previously have said Bahrain citizens would be given cash payments, while foreigners, who represent close to half of the overall population of 1.3 million would not be given compensation.
Zayani was quoted by BNA as saying subsidies removal would help stimulate imports of meat into the country due to encouraging additional importers to become involved, but he did not elaborate any further.
In addition, Zayani did not say the amount of money is expected to be saved by the government by removing the current meat subsidies.
A government budget proposal in July carried a deficit of 1.5 billion dinars or approximately $3.98 billion for 2015, which was up from the original planned 914 million dinars deficit.
The passage was delayed of the budget by six months due to parliament being opposed to the intention of the cabinet to cut the meat subsidies.