Kuwait loses an estimated KD245m ($890m) each year through the smuggling of subsidised fuel, according to investigations by two separate parliamentary committees.

The committees were formed after the consumption of diesel fuel from stations operated by state-refiner Kuwait National Petroleum Company (KNPC) was seen increasing to as high as 176,000 litres a month at the end of 2010, compared to an average of 45,000 litres a month.

In June, Kuwaiti police broke up a smuggling ring which it said was linked to a “neighbouring country”, which was moving large quantities of fuel by sea through the port of Doha, approximately 20 kilometres west of Kuwait City.

The National Assembly approved a $70bn budget in June, with some 90 per cent of spending allocated for fuel and food subsidies, as well as salary increases for government employees.