Gas price hike, subsidy cuts shake up Saudis
The Saudi government's new year is off to a shaky start financially — a burden it's sharing with its citizens, leaving them to wonder just how bad things will get.
Mohammed bin Salman, the deputy crown prince of Saudi Arabia and, at age 30, the youngest defense minister in the world, holds many sensitive responsibilities. He sets prices for gasoline and services in the kingdom, handles terrorism issues and tackles the influence of Iran and its regional allies. Some Saudis have high hopes about Salman, while others are concerned because they feel they are being forced to pay the bills of past failures and ambitious future projects.
The Saudi stock market posted heavy losses two hours before the market closed Jan. 17, as oil prices plummeted below $30 a barrel. This coincided with the lifting of economic sanctions on Iran.
Before unveiling its budget Dec. 28, the Saudi government implemented a number of precautionary measures to minimize repercussions of the drop in oil prices, which it knew would only worsen with Iran set to make its big comeback to the oil global market. The government also reduced its 2016 budget, projecting a deficit of 326 billion Saudi Arabian riyals ($86.9 billion). These measures also included withdrawing 244 billion riyals from the Saudi general monetary reserves during the first half of 2015.
In August, the Saudi government issued 20 billion riyals worth of treasury bonds that were sold to a number of public sovereign institutions and local commercial banks.
