A source in the Gulf oil industry told Reuters that Saudi officials were “seriously” thinking about reducing fuel subsidies, if gradually.
This was in response to a Saudi publication, Al Watan’s Saturday edition, quoting unnamed sources as saying that Saudi Arabia cannot leave gasoline prices at ultra-low levels indefinitely because that would hurt the economy.
The Reuters source said Riyadh would probably not act as aggressively as the UAE because of political and economic considerations, adding that UAE officials themselves had advised Riyadh to “start small”, perhaps by raising prices just a few percent.
Al Watan itself said that fuel subsidies cost $8 billion annually.
In another development, the Financial Times revealed that King Salman’s recent visit to Washington was also meant to attract American investments into Saudi Arabia.
Deputy Crown Prince Mohammed bin Salman Al Saud, the head of the country’s economic and development council, outlined his plans to US officials and executives, according to a Saudi official.
Prince Mohammed wanted investments in mining, downstream oil and gas, finance, healthcare, retail, entertainment, training and infrastructure.
All of this was promoted by the financial squeeze the country is suffering thanks to prolonged low oil prices.