Kuwait will increase the prices of gasoline by as much as 73 per cent from September, a move aimed at cutting fuel subsidies as the energy-rich Gulf state cut expenditure to compensate for falling oil revenues.

The Kuwait’s Cabinet has endorsed on a plan to “start rationalizing fuel subsidies where the prices will be restructured in harmony with the average rates” in the six member economic bloc of GCC, according to a cabinet statement reported by state news agency Kuna.

Hydrocarbon-reliant economies of GCC have faced significant economic challenges after oil prices fell from the mid-2014 peak of more than $110 per barrel. The Gulf states have cut spending and have reduced subsidies for fuel, public utilities which ran into billions of dollars annually. Some countries have frozen or slowed the growth of public sector wages as they try to plug the budget deficits in the wake of reduced falling oil revenues, their main source of income.

Saudi Arabia, Opec’s biggets oil exporter, the United Arab Emirates, Qatar, Oman and Bahrain have all taken such steps in recent months. Kuwait had hinted at such moves but has now mimicked the other Gulf Arab countries in making major reforms to its energy subsidies.

The price for the ultra gasoline grade would rise to 165 fils a litre, from 95 currently, the super grade to 105 from 65 and premium grade to 85 from 60, KUNA reported, adding that the new prices have been set after examining global rates.

Kuwaiti Finance ministry undersecretary Khalifa Hamada told the local al-Qabas newspaper at the end of 2015 that “rationalising” subsidies would save the government KD2.6bn ($8.7bn) over three years.

Anas al-Saleh, the Finance Minister and acting oil minister, in July predicted a 9.5 billion dinar budget deficit for the current fiscal year, which began on April 1, according to news agency Reuters.