MPs back ‘oil fund’ move
The Council of Representatives yesterday approved a proposal aimed at saving funds generated from the oil industry despite the current drop in oil prices.
MPs discussed deducting one US$ off every oil barrel sold from Bahrain’s production, in order to be deposited into the Future Generations Reserve’s Funds.
During the discussion, it was explained that the deduction procedure is existing under the condition that each oil barrel is sold for US$40 or above.
According to the proposal submitted by the Financial and Economic Affairs Parliamentary Committee, one US$ has to be deducted from each barrel despite the selling price of oil.
According to the committee members, no amount is expected to be pumped into the Future Generations Reserve’s Fund, considering that international oil prices are steadily dropping, reaching at US$40.
Few MPs opposed to the proposal as they claimed it would harm the economy more than benefiting it.
MP Khalid Al Shaer said “this will add to the country’s debt”.
He said that “the goals of the proposal are noble and would benefit the country’s fund reserve, but the implementation mechanism needs to be reconsidered”.
Supporting the proposal, MP Ahmed Qarata said: “The law already exists, we only requested to adjust it. This is to assure the stability of the economy and secure the future of the country.”
On his part, Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa underlined that “the Future Generations Reserve’s Fund is a key matter to the government,” revealing that “the country currently has BD500 million in the reserve fund which is dedicated for investment purposes”.
The minister recalled a previous proposal that was disregarded, with the aim of transforming the Future Generations Reserve’s Fund into a stabilisation fund that “could benefit the economy during financial difficulties”.
“We should consider changing the reserve fund from being saved for unknown generations to a fund to support the State during difficult financial circumstances,” he commented.
“We shall withdraw from the reserve fund in case oil prices drop sharply and re-pump those amounts into it when we’re experiencing budget surplus. ”
Shaikh Ahmed noted that “the matter requires more discussion”.
Sharing his views, Parliament and Information Affairs Minister Isa bin Abdulrahman Al Hammadi said: “It’s difficult to implement the proposal at the current time as the country remains in debt.”
“Even saving from the oil industry income would harm our economy at this stage. We support the proposal, but the timing and format aren’t suitable at this very time,” Al Hammadi added.
Photo Caption: Shaikh Ahmed bin Mohammed Al Khalifa and (R) MP Ahmed Qarata during the debate
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