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، Bloomberg reported.
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.