Saudi oil minister denies need to cut fuel subsidy

Ali al-Naimi said there is no "dire need" to cut down on the financial assistance measures implemented by the Kingdom's government for its citizens

Ali al-Naimi, minister of petroleum and mineral resources, Saudi Arabia.
Ali al-Naimi, minister of petroleum and mineral resources, Saudi Arabia.

Saudi Arabia's oil minister said the Kingdom does not need to reduce energy subsidies just yet. 

Ali al-Naimi, minister of petroleum and mineral resources for the Kingdom, said Saudi Arabia's low energy prices do not constitute a subsidy, since petrol and electricity are sold for more than their cost of production. 

"We assist our people in their livelihood. But that's not a subsidy," he said, according to Arabian Business.

"You only go back and take away assistance if you are in dire need. And, fortunately, Saudi Arabia is not today in such dire need," he added. 

Al-Naimi's comments follow a confirmation by Saudi Aramco that it will proceed with work on its Sadara Chemical plant despite the dip in global oil prices.

Sadara Chemical, a $20bn (SAR75bn) petrochem joint venture between Saudi Aramco and US-based Dow Chemical, is expected to start producing petrochemicals by the end of this year.

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