Monday, December 7, 2015

Proposal to Increase Domestic Electricity Prices in Saudi Arabia

The Kingdom of Saudi Arabia has been blessed with an immense amount of wealth due to the huge oil reserves found under the land of Saudi Arabia. With this immense wealth the Kingdom and Government of Saudi Arabia has turned the arid desert land into one of the biggest and brightest metropolitan countries in the world. The Kingdom has always taken care of its citizens by allowing them an easy life. Now we may ask what exactly an easy life is. For me an easy life is living above the poverty line while being able to afford something above the basic necessities of life and fulfilling most of the dreams and requests put forth by the family. Some might disagree with this classification, but to each their own view.

Now you might ask how the Kingdom has managed to keep the poverty line down to an absolute minimum. Well the answer is through heavily subsidized goods and services which allow all or most of the citizens and residents of the Kingdom to enjoy a good life. Well even though the Kingdom has managed to keep prices low on most essential services and goods, I think it is understood really that these low prices are not here forever especially since the world economy is not booming in any sense of the word. News is coming out that the Kingdom of Saudi Arabia is in consideration to raise the domestic energy prices which have been heavily subsidized by the Saudi Authorities. The announcement was made by the Petroleum and Natural Resources Minister of the Kingdom of Saudi Arabia, Ali Al Naimi.

The Minister stated that all prices will eventually rise. This statement was made while the Minister had been attending a mining conference. The Minister was asked whether the government had been considering a price hike or had been studying upon the issue and he answered in the positive that the government had been indeed pondering upon the issue.

The consumption of fuel in the Kingdom of Saudi Arabia has increased nine fold since the year 1971. This has made Saudi Arabia one of the biggest consumers per capita in the entire world. Keeping this in mind the petrol prices in the Kingdom of Saudi Arabia are the cheapest in the entire Gulf region and also in the entire planet. Motorists within the Kingdom of Saudi Arabia can have their car tanks filled for an estimated SAR 23 for a normal sedan and SAR 67 for most SUVs.

Keeping fuel aside, water and electricity two of the basic necessities of the modern world have also been subsidized heavily. Last year one of the senior officials at the World Bank stated that the Gulf States are spending around $160 billion only on the subsidies given on energy every year, the Kingdom accounts for half that amount. Al Naimi clearly denied that the fall in oil revenues has derived a sudden need in the Kingdom to develop upon other resources.

Source: Arab News

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