Saudi Arabia will need to reduce fuel subsidies that are becoming an ever-greater fiscal burden as its population grows, a former adviser to the country’s oil minister said.
The world’s biggest exporter of crude has a domestic fuel subsidy bill exceeding 162 billion riyals ($43 billion) a year, according to Mohammad Al-Sabban, an independent Saudi-based economist and energy consultant. Citigroup Inc. said in a report Sept. 4 that the kingdom may need to import oil by 2030 if its domestic crude use continues to outpace gains in production.
“Reviewing fuel prices in Saudi Arabia is inevitable if not a priority,” Al-Sabban said Dec. 20 by e-mail from the Red Sea coastal city of Jeddah. “Rapid growth in consumption is a real problem that can’t continue in any way. There is a general conviction on that on all levels in the kingdom.”
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