MANAMA, Oct 1 (Reuters) – Bahrain more than doubled the
prices of beef and chicken on Thursday, removing meat subsidies
in a politically sensitive move designed to save money as low
oil prices slash the government’s revenues.

Like other Gulf oil-exporting states, Bahrain has for many
years subsidised goods and services such as meat, fuel,
electricity and water, keeping prices ultra-low in an effort to
maintain social peace.

But since its oil income began to plunge last year, the
subsidies have become much harder for the government to afford.

Bahraini citizens – but not foreigners, who comprise about
half the population of roughly 1.3 million – will be at least
partially compensated with cash handouts from the government.

Nevertheless, the reform proved very controversial and ran
up against opposition in parliament. The government originally
announced in August that it would remove meat subsidies from
Sept. 1, but then delayed implementation by a month as it
consulted lawmakers and advisers.

Local media quoted officials as saying the reform was
expected to save the government about 22-29 million dinars
($58-77 million) annually – a small amount compared to a state
budget deficit projected at 1.50 billion dinars this year.

The government is also considering cuts to a range of other
subsidies, though it has not yet announced a concrete plan.

Customers for meat were largely absent from two major
markets in the cities of Manama and Muharraq on Thursday. Sayed
Majeed al-Hulaibi, who runs a meat shop in Manama, said some
consumers seemed to be boycotting meat in an effort to push
prices back down.

Bahrain is under more financial pressure than most of the
Gulf Arab states, which are much richer, but the other
governments have also started to reduce subsidies or are
considering how to do so. In August, the United Arab Emirates
made the biggest reform to date, cutting subsidies for domestic
sales of gasoline.

(Reporting by Nazeeha Saeed, Writing by Sami Aboudi and Andrew
Torchia; Editing by Mark Trevelyan)

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