(P)GCC Energy Subsidies Worth $160b a Year

(P)GCC Energy Subsidies  Worth $160b a Year(P)GCC Energy Subsidies  Worth $160b a Year

Arab states in the Persian Gulf, which pump a fifth of the world’s crude oil, spend more than $160 billion on energy subsidies annually, a top World Bank official said, Arab News reported.

“Gulf states spend around 10 percent of their gross domestic product every year on energy subsidies including fuel and electricity. That amounts to $160 billion,” said Shantayanan Devarajan, the bank’s chief economist for Middle East and North Africa. The six Persian Gulf Cooperation Council countries had a combined GDP of $1.64 trillion at the end of 2013, according to the International Monetary Fund. Saudi Arabia accounts for almost half of the (P)GCC subsidies.

“The (P)GCC and other MENA states must start cutting energy subsidies now otherwise problems associated with them will get worse,” Devarajan told a news conference in Kuwait on a World Bank report on subsidies. The report said 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.