Finance: REPORT: Saudi Arabia may raise petrol prices by 80% this year — to just under 30p per litre

The country has been forced to cut spending and diversify away from its oil-reliant economy as market prices sink.

LONDON – Saudi Arabia is considering raising domestic prices for gasoline and jet fuel by around 80% this year, Bloomberg reported, citing a person with knowledge of the plan.

The government is planning to raise prices to be roughly in line with varying international prices, Bloomberg reported, saying 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 — although this is still only about 26p.

Bloomberg said the 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.

According to Bloomberg, the person said the government was planning to increase other fuel prices gradually between 2018 and 2021, but that gasoline and jet fuel would only be subject to a one-time raise before the end of this year.

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

The country has been forced to cut spending and diversify away from its oil-reliant economy as market prices sink. Read Full Story