Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Saudi Arabia sees over $200 billion in savings from energy reforms plan - Finance Minister

CommoditiesApr 25, 2021 12:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
4/4 © Reuters. FILE PHOTO: Saudi Minister of Finance Mohammed al-Jadaan holds a news conference to announce the country's 2021 budget, in Riyadh 2/4

By Davide Barbuscia

DUBAI (Reuters) - Saudi Arabia could save over $200 billion over the next decade by replacing liquid fuel used for domestic consumption with gas and renewable energy sources, the finance minister said, as the kingdom seeks to cut costs to fund investments.

The world's top oil exporter has embarked on an ambitious reforms programme in recent years to modernize its economy, create jobs, and reduce its dependence on oil revenues.

"One initiative we're about to finalise is the displacement of liquids," said Finance Minister Mohammed al-Jadaan.

"This programme would represent savings for the government of about 800 billion riyals ($213.34 billion) over the next 10 years which can be utilized for investment."

Saudi Arabia this month signed power purchase agreements with seven new solar projects, part of plans to optimise the energy mix used for electricity production.

"Instead of buying fuel from the international markets at $60 and then selling it at $6 for Saudi utilities, or using some of our quota in OPEC to sell at $6, we’re going to actually displace at least 1 million barrels a day of oil equivalent in the next 10 years and replace it with gas and renewables," said Jadaan.

Hit hard by lower crude prices and the coronavirus crisis last year, the kingdom has recently announced plans to accelerate domestic investment, in a multi-trillion-dollar spending push led by state oil giant Aramco (SE:2222) and the powerful $400 billion sovereign fund, Public Investment Fund.

In an attempt to shift the burden of some of the planned investments away from the treasury, some companies have been asked to lower the dividends they pay to the government to boost capital spending.

"Between now and 2025, and possibly until 2030, fiscal sustainability is a priority for us. We believe that until we achieve all the targets that Vision 2030 has set, we need to maintain fiscal sustainability and control government expenditure," said Jadaan.

Vision 2030 is Crown Prince Mohammed bin Salman’s plan to shake up Saudi Arabia by weaning the economy off oil and building new industries and mega projects with the private sector to generate millions of jobs.

Unemployment was at 12.6% at the end of 2020, down from a record high of 15.4% in the second quarter last year when the economy was in the throes of the pandemic, but well above the 7% rate the kingdom wants to reach by 2030.

"We are maintaining our unemployment target for 2030 but because we are not out of the woods yet it is very difficult to say what the unemployment rate is going to be for 2021," said Jadaan.

"Our aim is to reduce the number so we will end up the year below where we ended up in 2019, pre-COVID, but I can’t tell you this is going to happen for certain."

($1 = 3.7498 riyals)

Saudi Arabia sees over $200 billion in savings from energy reforms plan - Finance Minister
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Dave Jones
Dave Jones Apr 25, 2021 3:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
must be getting hotter in the land of the House of Saud...
Dominion Elisha
Dominion Elisha Apr 25, 2021 2:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
can you send me the money??
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email