KUWAIT CITY, 8 December 2005 — Kuwait has projected a surplus of $4.1 billion for the 2006-2007 budget starting April, after adjusting upward the price of its oil, the head of Parliament’s budget panel said yesterday.
Revenues are projected at 9.3 billion dinars ($31.8 billion), while spending is estimated at 8.1 billion dinars ($27.7 billion), MP Jamal Al-Omar said after the panel began reviewing the draft budget.
Oil income is estimated at $29.3 billion or 92 percent of total revenues, and non-oil revenue at $2.5 billion. This is the first budget in the black to be projected by OPEC member Kuwait over the past quarter of a century because in past years it adopted a conservative price for calculating oil income.
Oil income in this budget was sharply increased to $36 a barrel as opposed to just $21 in the current 2005-2006 fiscal year. The price was $15 in previous years.
The price of Kuwaiti oil averaged $35.5 a barrel during the last fiscal year and has so far topped $50 in the first eight months of the current year, according to official figures.
The state budget for the current fiscal year, which runs between April 2005 and March 2006, estimates spending at $24.7 billion and revenue at $15.7 billion, leaving a projected deficit of $9 billion. But seven months into the year, Kuwait’s revenues amounted to $27.3 billion, according to Finance Ministry figures. The emirate is forecast to post a surplus of up to $26 billion.
Meanwhile, Kuwait’s second fuel marketing company said it will launch an initial public offering (IPO) of 228 million shares, equivalent to 76 percent of the company, on Dec. 11.
Each share in the al-Sour Fuel Marketing Co.’s IPO, which runs until Dec. 29, will have a nominal value of 100 fils and a premium of 5 fils, board member Abdullah al-Hajeri was quoted as saying in local dailies yesterday.
The shares will be offered in denominations of 1,000, 2,000 and 3,000 to give the chance for all Kuwaitis to take part in the IPO, Hajeri said. State-run Kuwait Petroleum Corp., the agency in charge of Kuwait’s energy sector, owns the remaining 24 percent stake. Sour has a paid-up capital of 30 million dinars ($102.7 million). A third fuel marketing company will be set up in 2006 in a bid by the government to privatize the downstream energy sector.
Each company will run 40 fuel stations, which were initially managed by KPC subsidiary Kuwait National Petroleum Co. (KNPC).