Saudi Arabia fines petrol ‘profiteers’

The ministry visited 900 petrol stations, finding that about one in five of them had closed shop to profit from the change in fuel prices.

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For petrol stations, Saudi Arabia’s Monday-night petrol price rises were a chance to profit – station managers needed just to shut shop, wait for tomorrow’s prices to kick in and serve a queue of petrol-thirsty motorists at an inflated margin.

But for 170 petrol stations, this clever plan – denying motorists petrol until state prices rose – landed them fines with the kingdom’s ministry of commerce and industry, according to the government body.

The ministry visited 900 petrol stations, finding that about one in five of them had closed shop to profit from the change in fuel prices.

The Saudi Arabian government, like the governments of the UAE and other Arabian Gulf states, sets the domestic price of petrol.

Octane 91 rose from 0.45 riyals (44 fils) to 0.75 riyals overnight – an increase of 66 per cent, according to the Saudi Press Agency. Octane 95 rose to 0.9 riyals, up from 0.6 riyals – a 33 per cent price rise. A range of other price increases on water and electricity will be introduced on January 11.

The Saudi government announced the increases in fuel prices after revealing its 2016 budget on Monday, which included promises to reform energy subsidies. The kingdom ran a budget deficit of about 16 per cent of GDP last year and is planning a budget deficit of 13 per cent next year.

The kingdom’s oil market strategy means economic pain at home.

The government depends on the sale of oil for 78 per cent of its revenue and oil prices are close to an 11-year low.

But the slow pace of diversification efforts means that the profitability of the private sector remains dependent on government spending, the IMF said.

abouyamourn@thenational.ae

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