Domestic energy price hike under study: KSA

Updated 31 October 2015
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Domestic energy price hike under study: KSA

RIYADH: Saudi Arabia is considering raising its heavily subsidized domestic energy prices, said Ali Al-Naimi, minister of petroleum and natural resources, Tuesday.
“All prices eventually rise,” Al-Naimi said on the sidelines of a mining conference. “Is it under study? The answer is ‘Yes,’” he told reporters.
Fuel consumption in Saudi Arabia has risen nine-fold since 1971, making the country one of the largest consumers per capita in the world, according to one study.
Saudi petrol prices are the cheapest in the Gulf and among the lowest on the planet. Motorists in the Kingdom can fill their tanks for around SR23 for a sedan or SR67 for an SUV.
Electricity and water are also heavily subsidized.
Last year, a senior World Bank official said the Gulf states spend more than $160 billion on energy subsidies annually. Saudi Arabia accounted for about half that figure.
At the conference, Al-Naimi denied that falling oil revenues have given an urgency to develop the Kingdom’s other resources, saying there were already significant efforts underway to do so. “Every wise country diversifies its economy,” Al-Naimi said.
Oil makes up roughly 90 percent of government revenue.


Turkish industrial output slides in April on lira weakness

Updated 8 min 11 sec ago
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Turkish industrial output slides in April on lira weakness

  • Industrial production, regarded as a signal of growth data, declined in the wake of last year’s currency crisis
  • Manufacturing activity contracted in May, shrinking for the 14th month in a row due to slowing purchasing activity and moderation in new orders

ISTANBUL: Turkish industrial production fell a greater-than-expected 4 percent year-on-year in April, the Turkish Statistical Institute said on Tuesday, reflecting the impact of renewed lira weakness as the index declined for an eighth consecutive month.
Industrial production, regarded as a signal of growth data, declined in the wake of last year’s currency crisis, which caused the economy to contract annually in the last two quarters.
In a Reuters poll, the calendar-adjusted industrial output figure was forecast to fall 2.5 percent year-on-year. Month-on-month, industrial production was down 1 percent in April on a calendar and seasonally adjusted basis, the institute said.
Despite some signs of recovery in previous months, industrial output was hit by another bout of lira weakness in late March and April.
The currency has lost nearly 10 percent of its value this year, extending a 30 percent slide in 2018, fueled mainly by Ankara’s strained ties with Washington as well as uncertainty over the outcome of Istanbul mayoral election.
Confidence indices and the Purchasing Managers’ Index (PMI) data for March and April had signalled that the increased volatility in markets would be reflected on the real economy, said Muammer Komurcuoglu, research director at Is Investment.
“The industrial production data announced today shows the negative impact is being felt beginning in April,” he said, adding that the negative outlook is expected to continue in May. “This situation points to the continuation of the contraction of growth in the second quarter,” he said.
Turkish manufacturing activity contracted in May, shrinking for the 14th month in a row due to slowing purchasing activity and moderation in new orders, a business survey showed earlier this month. Manufacturing PMI stood at 45.3, indicating contraction.
Economic confidence tumbled 8.5 percent in May, while consumer confidence dropped to its lowest level on record.