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Saudi Arabia Sets Price Cap on Gasoline Prices in July

The royal directive aims to support citizens by setting price cap (Asharq Al-Awsat)
The royal directive aims to support citizens by setting price cap (Asharq Al-Awsat)
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Saudi Arabia Sets Price Cap on Gasoline Prices in July

The royal directive aims to support citizens by setting price cap (Asharq Al-Awsat)
The royal directive aims to support citizens by setting price cap (Asharq Al-Awsat)

Saudi Arabia set a ceiling on gasoline prices, the most widely used fuel to supply vehicles in the Kingdom.

The royal directive stipulates that the state should shoulder any increase over June pricing during the monthly periodical revision of the pricing.

The Executive Committee for Governance of Amending Energy and Water Products' Prices has announced the issuance of a royal directive, setting the prices in June 2021 for gasoline (Octane 91/SR2.18) and gasoline (Octane 95/SR2.33), noting they shall remain as the local ceiling price for gasoline, as of July 10, 2021.

The gasoline price for July 2021 that witnessed an increase (Octane 91/SR2.28) a liter and (Octane 95/SR2.44) a liter will fall under the approved pricing ceiling. However, the periodic revision of pricing shall remain, noting that it shall not exceed the ceiling, reported Saudi Press Agency (SPA).

"This emanates from the keenness of the leadership on mitigating the burdens of the livelihood of citizens as well as residents, and its ongoing seeking to realize the public interest and to reinforce the local economic activity," according to the official statement.

Saudi Aramco, the largest oil exporter in the world, conducts a periodic monthly review of gasoline prices in the local market to reduce the consumer's vulnerability to fluctuations in export prices.

Saudis welcomed the royal directive, and many commented on social media that despite the dire economic conditions in the world, the Saudi leadership supported its citizens.

They asserted the country's leadership always considers the needs of its people and takes measures that can help mitigate any difficult economic conditions.

Also, on social media, Saudi citizens and residents discussed the directive quoting "gasoline price subsidy" on various sites, praising the state decision.

Saudi Arabia wants to develop the infrastructure for fuel supply services in the Kingdom, led by Aramco.

Aramco has succeeded in developing its service stations sector and enhanced its access to retail customers in Saudi Arabia, following its entry into a 50:50 joint venture with Total, based on operating service stations within the Kingdom.

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Saudi Aramco CEO ‘Fairly Bullish’ on China Oil Demand

Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
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Saudi Aramco CEO ‘Fairly Bullish’ on China Oil Demand

Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)

Saudi Aramco is "fairly bullish" on China's oil demand especially in light of the government's stimulus package which aims to boost growth, the head of the state-owned oil giant said on Monday.

"We see more demand for jet fuel and naphtha especially for liquid-to-chemical projects," Aramco CEO Amin Nasser said on the sidelines of the Singapore International Energy Week conference.

"A lot of it is happening in China mainly because of the growth in chemical needs. Especially for the transition, for the electric vehicles, for the solar panels, they need more chemicals. So that's huge growth there," Nasser said.

Meanwhile, progress in the energy transition in Asia is far slower, much less equitable and more complicated than many have expected, he told the conference, calling for a reset in policies for developing countries.

Even with the transition, as economies expand and living standards rise, the Global South is likely to see significant growth in oil demand for a long time, and while that growth will stop at some point, that is likely to be followed by a long plateau, Nasser said.

"If so, more than 100 million barrels per day would realistically still be required by 2050," he said in a speech at the Singapore International Energy Week conference.

"This is a stark contrast with those predicting that oil will, or must, fall to just 25 million barrels per day by then. Being short 75 million barrels every day would be devastating for energy security and affordability."

Countries should choose an energy mix that helps them meet their climate ambitions at a speed and manner that is right for them, Nasser said. "Our main focus should be on the levers available now."

These include encouraging investments in oil and gas that developing nations need and can afford, and prioritizing the reduction of carbon emissions associated with conventional sources by improving energy efficiency and developing carbon capture, utilization and storage (CCUS).

Despite trillions of dollars being invested in the global energy transition, oil and coal demand are at all-time highs, dealing a "hammer blow" to energy transition plans, he said.

Asia, which consumes over half of the world's energy supplies, still relies on conventional resources for 84% of its energy needs. Rather than displacing demand for conventional energy, alternatives are mostly meeting consumption growth, he said.

The shift to electric vehicles (EV) in Asia, Africa and Latin America is lagging that of China, the US and European Union as consumers struggle with affordability and infrastructure concerns, he said.

The progress of EVs has no bearing on the other 75% of global oil demand, Nasser said, as massive segments like heavy transportation and petrochemicals have few economically viable alternatives to oil and gas.

Developing countries may require almost $6 trillion each year to fund the energy transition, and Nasser called for them to have a greater say in climate policy-making.

"But Asia’s voice and priorities, like those of the broader Global South, are hard to see in current transition planning, and the whole world is feeling the consequences."