Saudi Arabia will soon raise gasoline and jet fuel prices by 80% on consumers as part of broader economic reform plans meant to curb domestic consumption of oil that could be used for exports.
The rise in prices is a result of the gradual elimination of energy subsidies that have long kept prices at world-leading lows for Saudis and residents in the Kingdom. The phase-out of these subsidies, which economists have said will be of significant overall benefit to the Saudi economy, will help Saudi leaders balance the budget.
While the rise in prices will be felt by Saudi consumers, they will still keep gas prices among the lowest in the world for Saudis.
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,” a source with knowledge of the changes told Bloomberg.
Meanwhile, as middle and lower income Saudis begin to bear the brunt of economic reforms, officials have announced a new system to alleviate the pain. According to a separate report in Bloomberg, the government is set to start monthly cash payments in a program to compensate low- and middle-income families hit by government austerity measures.
Payments under the so-called Citizen’s Account will start on Dec. 21.