Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on December 12, 2017

Bookmark and Share

Saudi Arabia Plans to Raise Gas Prices by 80% in January

Consumption

Saudi Arabia plans to raise domestic gasoline and jet fuel prices in January, part of a program to gradually eliminate energy subsidies as the kingdom seeks to overhaul its economy and balance the budget, according to a person with knowledge of the matter.

Gasoline prices are set to increase by about 80 percent, while jet fuel prices will be raised to international levels in one go, the person said, asking not to be identified because the matter isn’t public. Gasoline and other fuels such as diesel, kerosene and heavy fuel oil, will see incremental price increases over several years, the person said.

Excluding jet fuel, prices won’t reach international levels until 2023 at the earliest, and potentially by 2025. Electricity tariffs won’t be increased directly, but will rise gradually with other energy prices, the person said. The Finance Ministry, which oversees the subsidy reform program, did not immediately respond to a request for comment.

The new plan represents a slower timeline for the removal of subsidies as the government tries to offset the impact of the measures on a struggling economy. Authorities first reduced subsidies in December 2015 after years of debate as oil prices plummeted. Officials later said they would eliminate them entirely by 2020, part of Crown Prince Mohammed bin Salman’s Vision 2030 plan for the post-oil era.

Cash Transfer

The world’s biggest oil exporter is struggling to cope with low prices and spending cuts aimed to reducing a budget deficit that reached about 15 percent of gross domestic product in 2015. The economy contracted in the first two quarters this year.

Finance Minister Mohammed Al-Jadaan said in an interview in October that prices of some subsidized domestic energy products will rise to international levels later than previously seen. Authorities will not rush to balance the budget by 2019 to avoid hurting growth, he said. Next year’s budget will be announced on Dec. 19.

The Ministry of Labor and Social Development will on Tuesday announce the details of a cash transfer program, known as the Citizen’s Account, according to state television. Officials have said that the payments, intended to compensate low- and middle-income Saudis for austerity measures, will begin before the next round of subsidy cuts.

Saudi Arabia will start a stimulus package for businesses “very soon,” Fahad al-Sukait, president of local content and private sector development unit in the government, said on Tuesday at an event in Dhahran, eastern Saudi Arabia. The government wants to raise the contribution of small and medium-sized enterprises to the gross domestic product to 35 percent from a current 20 percent by 2030, he said.

bloomberg



10 Comments on "Saudi Arabia Plans to Raise Gas Prices by 80% in January"

  1. MASTERMIND on Tue, 12th Dec 2017 11:39 am 

    WORLD ECONOMIES IN TROUBLE: Middle East Oil Exports Lower Than 40 Years Ago
    https://srsroccoreport.com/world-economies-in-trouble-middle-east-oil-exports-lower-than-40-years-ago/

    Saudi Arabia may be out of oil to export by 2030 – Citibank
    http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9523903/Saudis-may-run-out-of-oil-to-export-by-2030.html

    Saudi Arabian oil reserves are overstated by 40% – Wikileaks
    https://www.theguardian.com/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

    I can’t wait to visit a new Saudi entertainment hub in 2030!

  2. Kenz300 on Tue, 12th Dec 2017 12:11 pm 

    It is time to stop all fossil fuel subsidies.

  3. Outcast_Searcher on Tue, 12th Dec 2017 4:26 pm 

    So KSA moves more toward a first world system of finances. Progress.

    And more toward a sustainable economy, even as oil prices rise as OPEC keeps to a moderate production level.

    So much for the doomers claiming KSA will “run out of money” in just a few years, with global financial armageddon to follow.

    Once again, something fast crash doomers refuse to acknowledge — when things don’t go well, people (and governments) can and do adapt. It doesn’t have to be TEOTWAWKI, unless pushing doomer porn scenarios is what you’re about.

  4. Davy on Tue, 12th Dec 2017 4:48 pm 

    “when things don’t go well, people (and governments) can and do adapt”
    “It doesn’t have to be TEOTWAWKI”

    Well, yea, but there is a point to adaptation or are you one of those sky is the limit cornucopians? Ignoring systematic and planetary limits always ends badly. We may be ok for some years or maybe not but playing the “its ok” game is not wise. A reckless doom porn is likewise unwise. Somewhere in between is where we should be searching for answers.

  5. Sissyfuss on Tue, 12th Dec 2017 5:13 pm 

    I’m searching for a deck chair to rearrange.

  6. Makati1 on Tue, 12th Dec 2017 6:33 pm 

    Sissy, the show is getting better and better. The ME is the place to watch this year, I think. Korea is at a stalemate unless Trumpet does something even more stupid than usual.

  7. DMyers on Tue, 12th Dec 2017 7:14 pm 

    As typical of MSM magazine stories, this one says almost nothing while still meeting a quota of words. IMHO

    We can’t infer much of anything about the KSA’s economic direction, and that includes any impression that they are moving toward a first world system of finances.

    Gone is the subsidy again. How does that play out? Have you ever been standing in a WalMart at the moment everyone realizes their EBT cards don’t work? A subsidy is a subsidy. Those who rely on them do not cede them readily.

    It may be very difficult to predict how one change will progress to another in such an intrinsically unchanging place.

  8. peakyeast on Tue, 12th Dec 2017 8:59 pm 

    So funny… They let women drive cars – and then they raise the cost 80% and more in the future 😀

  9. deadlykillerbeaz on Tue, 12th Dec 2017 9:41 pm 

    If I was gonna leave the US to live in a foreign land, it would be Saudi Arabia.

    Location, location, location.

    The price of gas is about a dollar per gallon, 0.90 SAR per liter. One Saudi Riyal is 27 cents.

    Gas will be 1.80 USD for 4 liters.

    https://www.expatistan.com/price/gas/riyadh

  10. DMyers on Tue, 12th Dec 2017 10:50 pm 

    Astute observation, Peak.

    SA1: “These women driving around, thinking it costs nothing to fuel a vehicle.”

    SA2: “If they want to be the man in the driver’s seat, they should know what it costs a man. They should even know what it is to pay eighty percent more than a man, and only higher from there.”

    SA3: “Don’t forget that the subsidies given to men have been a direct compensation for all the austerity they have suffered.”

    SA1: “Exactly, we payed the subsidy in exchange for the austerity, and we didn’t gain a dime!”

    SA3: “We’re a land of people ruled by princes. We’re not the CEO types of the West. The fact is, we can’t run a real economy. As America is the mother of all armies, we are the mother of all terror and false flags. Cry ‘nine eleven!’ We made that happen. That is where our future lies, as a source of eternal military conflict, and a reliable purveyor of new enemies.“

    SA1: “Can’t argue with that. It’s our strong point. I think we all agree on the eighty percent tax on women drivers. That goes into effect ASAP. Yes, my wife has a Chauffeur. We’ll remain fully subsidized. I’m..uhh.. luhvin ‘Democracy.’”

Leave a Reply

Your email address will not be published. Required fields are marked *