JEDDAH: Saudi Arabian Monetary Agency (SAMA) Gov. Fahad Al-Mubarak called for reforms to the country's system of energy and water subsidies.

In a speech published on the central bank's website late on Sunday, Fahad Al-Mubarak gave no indication that the government actually planned concrete action.

In May 2013, Economy and Planning Minister Muhammad Al-Jasser called for sharp cuts in subsidies, saying they distorted the economy. No such action followed.

Nevertheless Al-Mubarak's speech, delivered at an economic workshop organized by the Saudi government and the International Monetary Fund, may indicate Custodian of the Two Holy Mosques King Salman plans to take a fresh look at the issue.

"One of the existing challenges is enhancing the efficiency of the local consumption of energy and water, which resulted in distortion and a large waste of those important resources in addition to increasing the financial burdens on the government," Al-Mubarak said.

"This requires a review of price subsidies, which should be changed in a gradual and elaborated manner, to ensure that subsidies continue to target low- and medium-income segments of the community, taking into account the social impacts of any change."

In his speech, Al-Mubarak also called for further labor reforms to push more Saudi citizens into private sector jobs. Reforms over the past few years have made it more expensive for companies to hire foreign workers instead of Saudis.

"Recruitment of foreign labor should be rationalized; and general, technical and vocational education programs should be further developed," Al-Mubarak said.

The government has projected a record $38.7 billion budget deficit for 2015 because of the plunge in oil prices. Al-Mubarak said authorities were considering whether to cover the deficit by using the state's huge fiscal reserves, borrowing from the domestic financial market "which is characterised by a liquidity abundance and a low lending cost", or a combination of both options.