Dear MEL Topic Readers,
Saudi Arabia hikes petrol prices by 40% at the pump
A 40% price increase in a day. And it’s a petrol price, one of the most
essential and impactful costs for living and businesses. Sound like an
announcement of a country that suffers hyperinflation or an autocratic ruler,
or a decisive move to reduce the use of fossil fuel, doesn’t it? Not really.
Saudi Arabia, which just had its first municipal elections that women
took part in, made this radical announcement in order to cope with the declining
oil revenues due to falling oil prices. Depending over 80% of the revenues on oil,
Saudi’s 2016 financial deficit is projected to reach nearly $100 billion with
an estimated $162 billion revenue. That’s a huge deficit even for this deep
pocketed kingdom.
How impactful is this move for ordinary citizens? Though the increase
is steep, the gasoline price is still at $0.24 per liter, well below the one of
most other countries in the world.
Enjoy reading and thinking of the impact of this price increase in a
day of a country where oil has been more abundant and affordable than water.
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