By Hadeel Al Sayegh

DUBAI, July 28 (Reuters) - Kuwait is preparing legislation to facilitate issues of Islamic bonds by the government as it assesses options to finance a big budget deficit caused by low oil prices, Finance Minister Anas al-Saleh said on Tuesday.

"It is among the priorities of the government," Saleh said of the sukuk legislation. He was speaking via Twitter in a question-and-answer session with the public that addressed citizens' concerns about the widening deficit.

Early this month, Kuwait's parliament approved a budget for the current fiscal year that envisages a deficit of 8.18 billion dinars ($27.0 billion) - nearly half total spending - because of oil's plunge since mid-2014, which has slashed energy export revenues.

The government is looking at ways to save money by limiting energy subsidies and other handouts, and this has worried a public used to a lavish cradle-to-grave welfare system.

Saleh had previously said Kuwait, which has huge financial reserves, was considering various options to cover the deficit, including bond issues.

On Tuesday, he did not comment in any detail on possible government spending cuts, beyond saying a study was underway that would be presented to the cabinet once completed. He did not specify when that might happen.

Kuwait's Al-Nahar daily quoted unnamed government sources this week as saying the finance ministry was proposing to raise gasoline prices about 50 percent by next April to reduce its subsidy burden.

Efforts to deal with the budget deficit will not affect salaries and privileges provided to public servants, Saleh said.

(Editing by Andrew Torchia) ((; +971566883310;))