Veteran opposition lawmaker Ahmad Al-Saadoun yesterday alleged that hundreds of millions of dinars of public funds are being squandered due to organized smuggling of heavily-subsidized fuel to Iraq. The lawmaker said that fuel subsidies in the state budget had risen sharply from KD 6.5 million in the 2002/2003 fiscal year to as high as KD 800 million in the 2009-2010 fiscal year and again increased sharply to KD 1.028 billion in the current, 2010-2011 year.
Al-Saadoun said that based on official estimates, diesel smuggling to Iraq by land and sea, is costing Kuwait around $2.5 million daily or $912 million per year, adding this amounts to daylight robbery of public funds. The MP said that the estimated costs to the state of this illicit activity come from a letter sent by the interior ministry in 2009 to the oil ministry warning it that fuel, and more particularly diesel, was being smuggled into Iraq.
Kuwait sells fuel at one of the lowest prices worldwide mainly because of massive government subsidies. This has been exploited by smugglers, who have managed to steal large quantities of cheap diesel and smuggle it to neighboring Iraq where it can be sold at a much higher price.
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