Bahrain has hiked the price of gasoline from January 12, as the kingdom follows other Gulf neighbours in cutting back on expensive subsidies.

The price hike was approved by Bahrain’s Cabinet as part of a comprehensive economic and fiscal reform programme, state-owned Bahrain News Agency reported.

The price of 91 Octane (Jayyid) will go from 80 to 125 fils per litre (a 56% hike), while the price of 95 Octane (Mumtaz) fuel will increase from 100 fils to 160 fils per litre (a 60% increase).

Minister of Energy Dr Abdul Hussain bin Ali Mirza said that the Cabinet’s decision is part of wider economic and fiscal reforms, which will strengthen the country’s long-term development.

The decision will contribute to addressing current fiscal challenges faced by Bahrain, the minister added. The island kingdom, like other oil-producing GCC states, has come under pressure as a result of the global oil price plunge.

Dr. Mirza noted that the revised prices would be similar to those in other GCC countries. The price of gasoline has remained unchanged in Bahrain for 33 years, he added, and the amended price will promote efficient use of energy.

A recent article by the Financial Times notes that weak oil prices threaten the economies of Oman and Bahrain, which lack the large sovereign wealth funds of their GCC peers.

Gulf states have been under increasing pressure to scale back on energy subsidies as global oil prices show little chance of recovery. The UAE was the first to announce the scrapping of subsidies last year in a move touted to be beneficial for the economy and environment. It was also tipped to benefit industry, as diesel became cheaper at the pump.

Last month, Oman also announced plans to revise fuel prices from mid-January, as the government looks to trim spending on subsidies.