Saudis may delay energy price hikes
kuwait city/riyadh — Saudi Arabia, the biggest Arab economy, will probably delay plans to raise gasoline and other energy prices until later this year or early in 2018, according to four people familiar with the matter.
The government plans to raise energy prices in October at the soonest and most likely early next year, according to the people, who asked not to be identified because the information isn’t public.
Energy Minister Khalid Al Falih said in December that the next increase in energy prices “will not be late in 2017”.
A spokesman for the finance ministry declined to comment. Spokesmen at the economy and energy ministries were not immediately available for comment.
Saudi Arabia is trying to rein in spending and reduce dependence on oil after a global slump in crude prices.
Energy-subsidy reform is a key part of the reform plan, along with the sale of stakes in state-owned entities, including the world’s biggest crude exporter known as Saudi Aramco. The kingdom raised fuel prices in December 2015 and announced plans for more hikes.
Cash payouts
The government delayed the next round of price increases because it wanted to ensure that an increase won’t slow industrial activity, two of the people familiar with the matter said. The government is still assessing how much to raise prices to avoid hurting the economy, they said.
Payments to low- and middleincome Saudis to help them adjust to the subsidy cuts and other austerity measures, expected to begin this month, have also not started. The benefits programme, called the Citizen’s Account, will take effect before energy prices are raised, Al Watan newspaper reported on Wednesday, citing Yaser Al Zahrani, a media centre official for the programme. No date has been set yet, he said.
Saudi Arabia’s energy prices are still among the cheapest in the world, with 91-octane gasoline at SR0.75 (20¢) per litre, up from SR0.45 per liter before the first subsidy cut. The government aims to link them to international prices, Al Falih said in December. — Bloomberg