Several Saudi-listed companies have announced that they received a notice from Saudi Aramco to increase fuel prices from January 1 this year, a decision they said could affect finances and production costs.
Saudi Aramco, the world's largest oil-producing company, increased retail diesel prices for 2024 by 53 per cent to 1.15 Saudi riyals ($0.31) per litre, its third increase since 2016.
In their filings to the Tadawul stock exchange, companies warned the rise in feedstock and fuel prices would have a direct consequence on production costs, affecting their earnings starting from the first quarter of this year.
Saudi Basic Industries Corporation (Sabic), Saudi Kayan Petrochemical Company, Saudi Ceramic, Qassim Cement, Saudi Aramco Base Oil, Rabigh Refining and Petrochemical, Almasane Alkobra Mining and Nama Chemicals are among the dozens of companies that commented on the fuel price increase.
Sabic, the Middle East's biggest petrochemicals company, said in a filing to the Tadawul stock exchange that its annual cost of sales was expected to rise by about 1.7 per cent.
“This impact will appear starting from the first quarter of 2024,” it said.
Sabic Agri-Nutrients estimates the financial bearing at about 3.8 per cent of its annual sales costs based on the latest audited annual financials, while Yanbu National Petrochemical expects a 2.8 per cent rise in its annual cost of sales, the company said.
Saudi Kayan Petrochemical also predicted an increase of about 1.2 per cent in its annual cost of sales, based on its recent audited financial statement. The financial impact will likely show in the first quarter.
Sahara International Petrochemical said that it expected a 3.18 per cent rise in costs.
The companies said they were looking for ways to offset the rising costs.
In November, Saudi Aramco reported a 23 per cent drop in third-quarter net profit amid the kingdom's voluntary production cuts and a fall in crude prices.
Net profit after zakat for the three-month period to the end of September fell to 122.2 billion riyals, the state oil company said.
Revenue during the period also declined by 22 per cent to 424 billion riyals.
Brent, the benchmark for two thirds of the world’s oil, surged to nearly $140 a barrel after the invasion of Ukraine in March 2022, but has since given up most of its gains due to resilient Russian crude supply and fuel demand concerns.
