CNNFN writes article about Cheap oil is draining Saudi Arabia’s govt. coffers:
By Mark Thompson and John Defterios @CNNMoney
IMF: Things are about to get worse for the Middle East
IMF: Things are about to get worse for the Middle East
Cheap oil is forcing Saudi Arabia to think the unthinkable — cutting
government subsidies on gas.
Drivers in Saudi Arabia get massive discounts on gas, paying less than
10% of average prices in Europe, according to the International Energy
Agency.
But that perk costs the Saudi government enormous amounts each year.
A report by the International Monetary Fund last year estimated that
Saudi Arabia spends about 10% of GDP — roughly $60 billion —
subsidizing gasoline, diesel, electricity and natural gas.
A Saudi government source confirmed reports that domestic energy prices
could rise.
“There’s no decision, but it is being studied,” the government source
told CNN.
The IMF has been calling for months for Saudi Arabia to review energy
subsidies as one way of getting control of a budget deficit that will
balloon to 20% of GDP this year due to the collapse in oil revenues.
And the IMF had a stark warning for the kingdom last week — if oil
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