Oil producer Kuwait is expected to have recorded another massive fiscal surplus in its 2011-2012 fiscal year after crude prices largely surpassed its budget projections, according to a key Kuwaiti bank.

Kuwait had projected a price of $ 60 for its crude in its 2011-2012 budget but the actual average price was nearly 80 per cent higher at around $ 109 a barrel, National Bank of Kuwait (NBK) said in a study.

The surge in oil income allied with lower actual expenditure to widen the Gulf emirate’s fiscal surplus to between KD11.3 billion and KD12.4 billion ($ 40-44.6 billion), said NBK, which assumed three oil prices cases—low, base and high.

Kuwait has not yet released actual 2011-2012 budget figures but NBK expected the country’s oil revenues to have reached around KD 28.2 billion, nearly 45 per cent higher than the previous year, on the back of record oil prices.

“If as we expect, spending comes in at 5-10 per cent below the government’s budget, last year’s budget surplus could close between KD 11.4 billion and KD 12.4 billion before allocations to the Reserve Fund for Future Generations.”

Official figures for the first eleven months of the year show a surplus of KD 16.1 billion, but this surplus usually declines once late spending is included, it said.

The surplus forecast by NBK is in contrast with the budgeted deficit of KD5.9 billion and around KD7.33 billion after allocations for RFFG.

Kuwait had projected revenue at KD13.445 billion, including around KD12.3 billion from oil sales, and spending at KD19.435 billion.

In the low oil price case, NKB expected revenue to soar to KD29.8 billion while in the high case, it forecast earnings at KD29.9 billion.

As for 2012-2013, the report expected another large surplus of around KD10.2 billion and nearly KD7.2 billion after allocations for RFFG.

Kuwait, a major OPEC member, has recorded large fiscal surpluses over the past decade due to strong oil prices and spending curbs. The surplus was in contrast with fiscal situation during the 1990s, when the emirate suffered from huge shortfalls because of low crude prices and war costs.