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  • 05-11-14

    GCC to spend USD160b on energy subsidiaries annually

    (MENAFN) The GCC states, which pump a fifth of the world's crude oil, are expected to spend more than USD160 billion, which is around 10 percent of their gross domestic product (GDP), on energy subsidies including fuel and electricity, Arab News reported.

    The six GCC countries, which had a combined GDP of USD1.64 trillion at the end of 2013, though are expected to start cutting energy subsidies, along with the MENA states, due to the decline in oil prices.

    The Middle East and North Africa region, which is home to 5.5 percent of the world's population and boasts 3.3 percent of its GDP, accounts for 48 percent of global energy subsidies, with Saudi Arabia alone accounting for almost half of the GCC subsidies.

    The Middle East's region as a whole is expected to spend USD250 billion annually, with this sum including oil-exporting Iraq, Iran and Algeria which spend over 10 percent of their GDP on energy subsidies.

    This massive spending on oil subsidiaries is affecting the governments' public spending on health, education and investment and possibly threatening sustainability of public debt, like Egypt, which spends seven times more on fuel subsidies than on health.

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