According to a recent article by Business Insider, Saudi Arabia will raise gas and jet fuel prices in January in an effort to reduce energy subsidies and bolster state revenue. Gas prices will reportedly jump by about 80%, with other fuel varieties and electricity tariffs expected to follow suit over the coming years. The hike is part of the Kingdom’s efforts to reduce the amount it spends on state handouts and subsidies, and to diversify its economy away from oil. In 2015, the International Monetary Fund predicted the Kingdom could run out of resources within five years if its rate of spending and the oil price slump continued. Under Crown Prince Mohammed bin Salman’s plans to reform the economy, fuel subsidies will eventually be totally eliminated. Such moves symbolize a concerted change in the social contract between the Saudi monarchy and its people, which has become increasingly untenable in the face of low oil prices.
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