Saudi Arabia subsidises electricity with SAR450 billion in 3 years

August 9, 2015 3:35 pm

Saudi Arabia has paid a record high of SAR450 billion to subsidise electricity prices in three years, according to data.

In 2014, the Saudi government subsidised electricity with SAR150bn, according to data collected and analysed by Al-Eqtisadiah.

The government provides electricity companies with fuel needed to generate power at prices that are very much below global rates.

Electricity companies use four types of fuel to generate power: they are heavy fuel, natural gas, diesel and crude oil.

One million British thermal units of heavy fuel are sold for $15.4 in global markets, while in Saudi Arabia they are sold for a meagre $0.4, indicating a 97 per cent price difference.

Natural gas averages a price of $9 in global markets but is sold for local electricity companies at $0.7. Furthermore, one million British thermal units of diesel are sold for $21.6 but locally, they are sold for $0.6.

During 2012-2014, Saudi Arabia’s consumption of electricity amounted to 829,000 gigawatts an hour.

Last year saw electric power consumption rising by 11 per cent, the highest ratio since 2006.

The residential sector accounted for the largest proportion of electric power consumption at 44 per cent.

(SAR1 = AED0.98; $1 = AED3.67, at the time of publishing)


AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.