“As of yet there is no movement on the 75 cents per MMBtu price, but I expect it to rise relatively soon. Energy policymakers in the kingdom have been converging on a price hike agreement. From my discussions with them in October, there appeared to be an emerging consensus that the gas price would more than double, to somewhere around $2.00 perhaps as high as $2.50”, Krane said. “Most Saudis in the energy sector advocate higher prices, but there are strong interests on the other side of the equation too; those in the petrochemicals, cement and general industry sectors which have been reaping uneconomic profits via their supply of underpriced gas. The power of this lobby and its argument that raising energy prices will kill Saudi jobs should not be underestimated,” said Krane.
