Tunisia Raises Fuel Prices by 4%

A gas station attendant pumps fuel into a customer's car at a gas station in Tunis, Tunisia June 01, 2018. Reuters
A gas station attendant pumps fuel into a customer's car at a gas station in Tunis, Tunisia June 01, 2018. Reuters
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Tunisia Raises Fuel Prices by 4%

A gas station attendant pumps fuel into a customer's car at a gas station in Tunis, Tunisia June 01, 2018. Reuters
A gas station attendant pumps fuel into a customer's car at a gas station in Tunis, Tunisia June 01, 2018. Reuters

Tunisia raised fuel prices by four percent on Saturday, following four consecutive hikes in 2018, in an effort to rein in its budget deficit and reduce it to about 3.9 percent of the GDP after it reached 4.9 percent last year, announced the Ministry of Industry.

Based on the ministry’s statement, gasoline was increased 0.080 Tunisian dinars to 2.065 dinars, sulfur-free diesel 0.080 Tunisian dinars to become 1.825 dinars and diesel became 1.570 dinars after a 0.090 dinar hike.

The ministry explained that the hike was introduced in light of the rise in global prices after the price of crude oil reached $68 a barrel.

However, the ministry asserted that the price of liquefied petroleum gas (LPG) used in households has not been adjusted.

Tunisia aims to introduce reforms requested by the country’s international lenders, the government said in the first hike this year.

Through these repeated increases, Tunisia is responding to one of the conditions of the International Monetary Fund (IMF) and a number of international financing and lending institutions that have demanded a three-month automatic adjustment to fuel prices in an attempt to reduce the budget deficit, which is largely linked to spending on energy subsidies.

Tunisia's financial and economic expert Ezzeddine Saidan predicted that these increases would continue as long as international oil prices are on the rise.

He pointed out that the Finance Ministry adopted in the 2018 budget reference oil prices within the range of $54, and soon oil prices exceeded the threshold of $70, which left a large financial gap, and forced the government to pass a supplementary law to overcome the scarcity of financial resources and a growing budget deficit.

The Tunisian Confederation of Industry, Trade and Handicrafts objected the repeated fuel price hikes. Head of the confederation, Samir Majoul, said the measures will have many repercussions on the Tunisian economy.

He warned that the price increase will cost investors additional funds which they can’t afford, and will be negatively reflected on a number of economic activities such as transportation, electricity, gas and various industrial production processes.

The Ministry of Finance indicated that every dollar increase in oil prices requires additional financial resources of about 120 million Tunisian dinars from the state budget, stressing that the government cannot make such expenditures in light of a drop in production and exports.

The 2019 budget allocated 2.1 billion dinars for the petroleum industry, and the government said the total energy deficit amounted to one third of the trade deficit in 2018, which reached 19 billion dinars.

Tunisia's oil production has significantly dropped in the past years, reaching an average of 42,000 barrels per day (bdp). Before 2011, oil production was in the range of 80,000 bpd, covering about 48 percent of the country's petroleum needs.



Saudi Bank Loans to the Private Sector Reach Record Highs

A general view of the Saudi capital, Riyadh. (SPA)
A general view of the Saudi capital, Riyadh. (SPA)
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Saudi Bank Loans to the Private Sector Reach Record Highs

A general view of the Saudi capital, Riyadh. (SPA)
A general view of the Saudi capital, Riyadh. (SPA)

Saudi banks’ lending to the private sector reached an all-time high in January 2025, reflecting ongoing efforts to strengthen the Kingdom’s non-oil economy in line with Vision 2030.

According to the Saudi Central Bank’s (SAMA) monthly report, bank claims on the private sector grew by nearly 14% year-on-year in January, reaching SAR 2.89 trillion ($770.6 billion), compared to SAR 2.54 trillion ($676 billion) in the same month of the previous year. These claims include loans, advances, and other credit facilities extended by banks, serving as a key indicator of available credit in the financial system.

Bank credit accounted for approximately 96% of total claims on the private sector, which also includes investments in private securities. Bank lending rose to SAR 2.79 trillion ($744 billion) in January, marking a 13% annual increase from SAR 2.46 trillion ($656 billion) in January 2024.

Meanwhile, deposit growth was comparatively lower, rising by 9.2% year-on-year to reach a record SAR 2.73 trillion ($728 billion) in January 2025, up from SAR 2.50 trillion ($666 billion) in the same period of 2024.

Speaking to Asharq Al-Awsat, Anton Lopatin, Senior Director for Banks at Fitch Ratings, explained that most Saudi private sector companies have limited access to public financing through bonds or sukuk issuances. As a result, bank loans remain the primary means of securing working capital and funding new projects.

Over the past five years, total private sector financing has nearly doubled, indicating a strong demand for credit from businesses and individuals. This growth is essential for further expanding Saudi Arabia’s non-oil economy and aligns with Vision 2030.

Despite the rapid credit expansion in recent years, Saudi Arabia’s economy remains less leveraged compared to other Gulf Cooperation Council (GCC) countries, such as the UAE, Qatar, and Kuwait. Lopatin noted that Saudi banks have significant room for further expansion, particularly given the strong projected growth of the non-oil sector, which is expected to exceed 4% in 2025–2026.

Lopatin also pointed out that anticipated interest rate cuts should theoretically lower borrowing costs. However, this will also depend on banking sector liquidity. He noted that in December 2024, Saudi banks experienced a monthly decline in deposits for the first time in five years, leading to upward pressure on funding costs. If the funding gap continues to widen—where loan book growth outpaces deposit accumulation—the benefits of lower interest rates for borrowers may be diminished.

SAMA’s report also highlighted a continued deficit in Saudi banks’ net foreign assets, which turned negative in July 2024 for the first time since 1993. In January 2025, the deficit stood at SAR 10.7 billion ($2.8 billion), compared to a surplus of SAR 70 billion ($18.6 billion) in the same month of the previous year.

Net foreign assets represent the difference between banks’ foreign investments and external liabilities, reflecting the banking sector’s exposure to the global economy and its ability to meet international obligations.

As part of Vision 2030, Saudi Arabia is aiming to increase the contribution of small and medium-sized enterprises (SMEs) to GDP to 35%, while raising the private sector’s share to 65%. Additionally, the Kingdom is seeking to boost foreign direct investment (FDI) to 5.8% of GDP and expand non-oil exports to 50% of total exports.

The International Monetary Fund (IMF), in its latest Article IV consultation, projected that Saudi Arabia’s public debt-to-GDP ratio will reach 30% in 2025. It also expects private sector credit growth to reach 9.7% in 2025, compared to 10.1% in the previous year.