RIYADH: Saudi Arabia is reportedly mulling plans to raise retail gasoline and diesel prices in 2017 for the second year in a row. The rise in domestic fuel prices is expected to be announced before the end of the year, Bloomberg reported citing a source close to the matter. It added that the Saudi government is looking into either linking local fuel prices to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market. Bloomberg said media officials at the energy ministry in Riyadh weren’t immediately available for comment.
The fuel plan comes as Saudi Arabia’s 2017 state budget is likely to show Riyadh has shrunk a huge deficit caused by cheap oil faster than expected. This year has been one of the most painful for the Saudi economy in decades. Growth slowed sharply and speculators bet against the Saudi currency as the government fought to curb a deficit that totalled a record SR367 billion ($98 billion) in 2015.
Saudi Arabia last year took the unprecedented step of reducing fuel subsidies and raising retail gasoline prices by about 50 percent. On December 28, 2015, Saudi Arabia announced that it raised retail gasoline prices while also increasing diesel, natural gas, ethane, diesel, kerosene, electricity and water prices as part of the government’s five-year plan to reduce subsidies.
