Saudi Arabia has raised domestic gasoline prices by more than 50 percent as of Tuesday (Dec 29th) in response to its budget deficit of almost $98 billion.
Prices will also increase on water, electricity, diesel and kerosene, as a number of subsidies are to be cut over five years, according to reports.
High-grade gasoline will increase by 50 percent to 0.90 riyals ($0.24) a liter, and lower-grade gasoline will see a 67 percent increase.
According to AFP, the gasoline prices in the kingdom have been the cheapest in the Gulf and one of the cheapest in the world.
Other Gulf states have raised fuel prices, with United Arab Emirates and Kuwait lifting subsidies earlier this year.
The IMF has said that if Saudi Arabia raised its fuel prices to Gulf levels, it will save around $17 billion annually.
The global falling oil prices and increased Saudi spending have contributed to the Kingdom’s deficit.
Observing these moves by traditionally Oil rich nations lends credence to the arguments to reduce the fuel subsidies locally.