THE POLITICS OF REFORM141Kuwait’s shortage of natural gas forced the monarchy to begin import-
ing LNG at world market prices. Even so, ever- larger amounts of crude
oil were still being diverted into the power sector. Liquid fuels accounted
for 60 percent of power generation at the end of 2016, the highest share
in the Gulf.^6
This predicament was entirely of the government’s own making. Elec-
tricity prices had been fixed for fifty years at a rate that ranks among
the world’s lowest. Charges were so tiny that, despite consumption at
world- leading rates, most households were billed once a year, rather than
monthly. Even so, the Ministry of Electricity and Water only managed
to collect payment for about 55 percent of the electricity it sold.^7
Stymieing reform was the structure of politics in Kuwait, which fea-
tured the unproductive combination of an autocratic monarchy and an
elected legislature endowed with the power to spoil monarchical initia-
tives. Kuwaiti elections tended to bring populists to parliament, politi-
cians who view it as their duty to clamor for more rent distribution, not
less. A tariff increase in Kuwait would first have to be approved by the
emir and his cabinet and then face the unlikely prospect of passage in
parliament.^8 Several parliamentarians declared they would fight any such
proposals.
Despite the opposition and hurdles, Kuwait succeeded in raising some
energ y prices (table 9.1). Kuwait hiked diesel prices in January 2015 from
69 US cents to US$2.15 per gallon, but within a month it readjusted the
price to US$1.32 per gallon. Businesses with “heavy demand” continued
paying the original price.^9 In 2016, Kuwait increased gasoline prices by
41 percent— the first increase since 1998— and pledged to adjust fuel
prices in line with market shifts every three months. Regular gasoline
rose from 77 US cents to US$1.07 per gallon, while premium jumped
from 81 cents to $1.35 per gallon.^10
And in late 2017, Kuwait at long last raised electricity and water
prices— but just for commercial and government customers. Rates for
nonresidential users jumped from two to 25 fils, or from less than one
US cent to about 8 US cents per kWh. Water prices for the same cus-
tomers also rose substantially, from $2.65 to $13.25 for 1,000 gallons.^11