Saudi’s state oil company, Aramco stated that Riyadh had the capacity and was better equipped to wait out current low oil prices compared to other oil producers, while projecting a more stable market in 2016, Reuters reported, quoting Aramco’s Chairman, Khalid Al-Falih.
The announcement is in line with Saudi Arabia’s no-cut oil policy on output, despite a sharp fall in global oil prices.
In other remarks, cited by Arab News, Al-Falih explained that the local industries, including the petrochemical sector, would be able to adjust to the rise of domestic energy prices and remain competitive. This was in reference to the unveiling of the 2016 budget that is emphasizing subsidy reforms by raising the prices for fuels, water, and electricity as well as gas feedstock used by industry. These reforms are designed to relieve pressure on Saudi finances.
According to Trade Arabia, the Saudi Electricity Co (SEC) said it expected effects of fuel and electricity price hikes to roughly balance out, with little overall impact on its bottom line.