Saudi Arabia is reportedly planning to hike petrol and jet fuel prices as early as in January 2018. The move is part of a wider objective of eventually doing away with fuel subsidies that have been a burden on the state exchequer in recent years due to lower oil prices.

Petrol prices are set to soar by about 80 per cent, while jet fuel prices will be raised to international levels, Bloomberg has reported quoting a source. Prices of other fuel types such as gasoline and diesel, electricity and other state utility tariffs are also expected to increase in due course, as part of the national agenda to boost the kingdom’s revenues by saving budget allocations for subsidies that have cushioned Saudi citizens and industries for several decades.

The Saudi Ministry of Energy, Industry and Mineral Resources has stated that the changes in the prices of the fuel varieties, which is being considered as part of a cabinet decision, will come into force during the first quarter of the next fiscal year, without specifying when. It added that state energy giant Saudi Aramco will announce details and mechanism of these changes to its customers.

‘The review of these prices are aimed at improving the efficiency of the government support program[me] in favo[u]r of the eligible Saudi beneficiaries under the Citizen’s Account Program[me]’, the ministry said in a statement.

Riyadh first reduced subsidies in December 2015, when prices rose by 40 per cent to $0.24 per litre. Should the reported hike be implemented, the price will rise to $0.43 per litre.

However, despite the reported reduction of subsidies, fuel prices, excluding jet fuel, are not expected to rise to international levels until 2023 at the earliest. Saudi Arabia has arguably the most benevolent fuel and utilities subsidy scheme in the world, which has been maintained by healthy oil income for generations.