Saudi Arabia should cut energy subsidies that are burdening public finances, the economy minister and the head of the state-run utility said, a move that would also tackle the issue of erosion of crude exports.
Rock-bottom prices for gas, power and gasoline have turned the world’s 20th biggest economy into its sixth-biggest consumer of oil, producing less than $3.70 of economic output for every kilogram of oil equivalent that it used in 2010, compared with the global average of $6.20, according to World Bank data.
“This has become an increasingly important issue as these subsidies have become increasingly distorting to our economy. This is something we are trying to address,” Economy and Planning Minister Mohammed Al-Jasser said yesterday.
“Rationalization of subsidies, particularly on fuels for non-targeted participants”, is needed to improve Saudi productivity, he told a financial conference in Riyadh.
Pops wrote:http://www.albawaba.com/business/lifting-oil-subsidies-490266
TheDude wrote:Pops wrote:http://www.albawaba.com/business/lifting-oil-subsidies-490266
That article states that "Nearly 40 percent of Saudi electricity is still produced by burning oil." The newest data I could find when I looked into this subject a few years back was for 2006, at 52.3% - the previous numbers from the same source (World Bank) were at 51.9% in 1990. Don't see how the WB could be that far off the mark, and seriously doubt they've shaved that much consumption off even in 7 years, their exports would be much more robust I'd think.
My back-of-the-napkin calc suggested about 415 kb/d used for power in 2006 - a real rough estimate, converting Twh to barrels I think, did the work some time ago. Some news sources mentioned really steep levels in the AC happy summer months, >1 mb/d. You see very sharp seasonality for sure - they burn raw crude when demand peaks. A transition to NG is quite feasible of course, if you have the gas literally on tap. Forget how much associated gas has come on line of late - and of course that presents its own problems when KSA has to shut in to meet quotas.
ROCKMAN wrote:sub - Here are the latest numbers from wiki...if you trust them:
"Electricity generation is 65% from Oil, 27% from Natural Gas and 8% from steam. Generation capacity is approximately 30 GW"
Not sure what they mean by "steam" since that's not really an energy source.
TheDude wrote:Thanks for the link, ROCK. They're a net exporter of practically everything, is what I meant; but have been shipping in more diesel like your story states. I wonder how much extra raw crude they're burning up these days during the summer peak; you'd think they'd phase that out first of all.
ROCKMAN wrote:MBS - What percentage of your refined products are imported compared to that produced in Germany from imported oil? Lately I've been focused on efforts by oil exporting countries to transition from only exporting oil to more product export.
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