Saudi Arabia has announced on Monday that it will raise the prices of fuel, gas, electricity, water and sewage services. It will also impose tax on soft drinks and tobacco in its 2016 budget; after reviewing the relevant royal ordinances, regulations and decisions.
According to this decision, 91 Octane fuel will cost SR 0.75 a liter, while 95 Octane fuel will cost SR 0.90 riyals a liter.
In this context, the Kingdom has announced on Monday its budget for the year 2016; allocating SR 183 billion to support it aiming at countering any potential deficit in revenues resulting from oil prices fluctuations. Saudi Arabia’s 2016 budget will see projected spending fall to SR 840 billion in 2016, down from the SR 975 billion in 2015. The original budget for 2015 projected spending at SR 860 billion.
In 2016, the budget targets to shrink budget deficit to SR 326 billion reducing pressure on Riyadh to pay its bills by liquidating assets held abroad. The government forecasts next year revenues to be 514 billion, down from SR 608 billion in 2015.
The Ministry of Finance pointed out that the security and military sector had the largest share in the 2016 budget with an allocation of 213,367,000 riyals; followed by education, training and labour sector which received an allocation of 191,695,000 riyals; then the health services and social development with 104,864,000 riyals.
The Ministry said: “Due to the recent excessive volatility of oil prices and to address potentially declining revenues, a budget support provision of SR 183 billion has been established to offer increased flexibility to redirect capital expenditures and operating expenditures on both ongoing and new projects… and to meet any emerging expenditure needs.”