Key Takeaways
- • Bahrain's Parliament will debate and vote on a proposed oil export levy worth up to BD40 million a year to fund the pension and social insurance fund, as MPs seek to restore annual pension rises suspended under a 2020 law.
- • The levy, endorsed unanimously by Parliament's Services Committee, would charge $1 per barrel of crude exported when prices exceed $40, rising to $2 per barrel above $80.
- • A parliamentary study estimates annual proceeds at BD18m to BD20m for oil between $40 and $80 a barrel, and BD37m to BD40m above $80, based on annual crude exports of roughly 50m to 53m barrels.
- • The levy would not by itself lift the legal freeze on pension increases, and Parliament's Financial and Economic Affairs Committee warned it could widen the budget deficit by diverting oil revenue from the Treasury.
Summary
Bahrain's Parliament will debate and vote on a proposed oil export levy of up to BD40 million a year for the kingdom's pension fund, according to a report from News of Bahrain dated 8 November 2026. The measure is intended to help restore annual pension rises that were halted in 2020 after years of deficits left the retirement fund struggling to meet its costs.
The levy was endorsed unanimously by Parliament's Services Committee. It would take $1 from every barrel of crude oil exported when prices exceed $40, rising to $2 when prices pass $80. All proceeds would go to the pension and social insurance fund, providing it with an additional income source. The bill was proposed by MPs Khalid BuAnaq, Hisham Al Awadhi, Ahmed Al Salloom and Zainab AbdulAmeer, who argue that retirees should share in the proceeds when oil prices rise.
A parliamentary study estimates annual receipts at BD18 million to BD20 million when oil trades between $40 and $80 a barrel, rising to between BD37 million and BD40 million above $80. The estimates draw on oil production and export data from 2023 to the first half of 2025, which put annual crude exports at roughly 50 million to 53 million barrels. The study cautions that actual revenue would depend on world oil prices, output and export volumes.
The levy would not, on its own, lift the 2020 law that suspended annual pension increases. Under that law, increases may be paid when an actuarial assessment finds a surplus, but only with the required approval and within an inflation-linked limit, with smaller pensions also taken into account. Parliament's Financial and Economic Affairs Committee said the levy would strengthen the pension fund but warned that diverting oil revenue from the Treasury could add to the budget deficit.
The bill was revised after parliamentary legal adviser Dr Ziyad Al Mufarji identified a drafting error that could have allowed both the $1 and $2 deductions to apply to the same barrel, effectively creating a $3 charge on barrels sold above $80. The revised text makes the $2 charge the sole deduction above that level. Under the five-article bill, deductions would begin at the start of the financial year after the law takes effect, and the Finance and National Economy Minister would have three months to issue collection rules.
The levy was endorsed unanimously by Parliament's Services Committee. It would take $1 from every barrel of crude oil exported when prices exceed $40, rising to $2 when prices pass $80. All proceeds would go to the pension and social insurance fund, providing it with an additional income source. The bill was proposed by MPs Khalid BuAnaq, Hisham Al Awadhi, Ahmed Al Salloom and Zainab AbdulAmeer, who argue that retirees should share in the proceeds when oil prices rise.
A parliamentary study estimates annual receipts at BD18 million to BD20 million when oil trades between $40 and $80 a barrel, rising to between BD37 million and BD40 million above $80. The estimates draw on oil production and export data from 2023 to the first half of 2025, which put annual crude exports at roughly 50 million to 53 million barrels. The study cautions that actual revenue would depend on world oil prices, output and export volumes.
The levy would not, on its own, lift the 2020 law that suspended annual pension increases. Under that law, increases may be paid when an actuarial assessment finds a surplus, but only with the required approval and within an inflation-linked limit, with smaller pensions also taken into account. Parliament's Financial and Economic Affairs Committee said the levy would strengthen the pension fund but warned that diverting oil revenue from the Treasury could add to the budget deficit.
The bill was revised after parliamentary legal adviser Dr Ziyad Al Mufarji identified a drafting error that could have allowed both the $1 and $2 deductions to apply to the same barrel, effectively creating a $3 charge on barrels sold above $80. The revised text makes the $2 charge the sole deduction above that level. Under the five-article bill, deductions would begin at the start of the financial year after the law takes effect, and the Finance and National Economy Minister would have three months to issue collection rules.
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