Saudi Arabia to raise petrol prices by 80pc this year

RIYADH: Saudi Arabia is planning to raise domestic prices for petrol and jet fuel by around 80% this year.

The government is considering to hike prices to be roughly in line with varying international prices, and the decision could take effect as early as November.

By current prices, this could result of an increase of 80% for octane-91 grade gas, from 0.75 riyals per litre to 1.35 riyals per litre — but this is still only about 26p.

Under the plans, Saudi Arabia would adopt the same approach as the UAE by linking car fuel prices to international rates, a source told Bloomberg.

According to Bloomberg, the Saudi government is planning to delay increases in other energy prices until 2018.

Saudi Arabia is the world’s biggest oil exporter, but has been forced to diversify its economy away from oil, as global prices have fallen and oil’s long-term future looks uncertain.

The drop in prices, caused the country to announce public spending cuts and rises in fuel and energy taxes in 2015.

Since diesel and heavy fuel oil are used to generate power and for industrial production, the Bloomberg report said, the government may cap increases in these fuels.

Saudi Arabia is currently undertaking other reforms to boost non-oil revenues, including a recently introduced SAR100 a month dependents fee for foreigners and the doubling of a work permit fee for expats in the private sector.