Inflation in Saudi Arabia climbs 0.2% to hit 3.4%: GASTAT
Updated 15 February 2023
Reem Walid Nirmal Narayanan
RIYADH: Saudi Arabia’s inflation rate rose 0.2 percentage points month-on-month in January 2023 in a sign the Kingdom is getting to grips with the price increases sweeping the globe, according to data released by the General Authority for Statistics.
Inflation was 3.4 percent higher in January 2023 compared to the same month of 2022, primarily driven by the rising costs of housing, water, electricity, gas, and other fuels which went up by 6.6 percent.
Food and beverages prices rose by 4.2 percent.
Saudi Arabia’s annual inflation rate in January 2023 is the highest since June 2021, when it hit 6.6 percent.
“Prices for housing were the main driver of the inflation rate in January 2023 due to their high relative importance in the Saudi consumer basket with a weight of 25.5 percent,” said GASTAT in the report.
Moreover, the GASTAT data indicates that the monthly consumer price index was affected by a 0.8 percent increase in the prices associated with housing, water, electricity, gas, and other fuels.
This comes as actual rentals for housing during the same period witnessed a 1 percent increase, the report highlighted.
Wholesale prices in the Kingdom surged 3.6 percent in January 2023, compared to the same month in 2022, the GASTAT report revealed.
The increase in January is mainly attributed to the rise in prices of food products, beverages, tobacco, and textiles by 7.6 percent.
The hike in prices in the food products, beverages, tobacco, and textiles is associated with the fact that dairy products, alone, climbed as much as 20 percent, the data disclosed.
When compared to December 2022, wholesale prices in the Kingdom increased 0.7 percent as a result of an increase in food products, beverages, tobacco, and textiles, which saw a rise of 1.7 percent. During the same period, the price of dairy products jumped 10 percent as well.
“In January 2023, the Wholesale Price Index increased by 3.6 percent compared to the same month in 2022, higher than in December 2022 (3 percent), but clearly below last year’s average,” said GASTAT in the report.
Double-digit growth in heat pump sales confirms world’s sustainable shift
Updated 10 sec ago
Arab News
RIYADH: As the world looks to sustainable heating, global sales of heat pumps recorded double-digit growth of 11 percent in 2022, a trend seen for the second year in a row, driven by increased policy support and incentives.
The strong uptake comes as governments are making efforts to reduce greenhouse gas emissions.
Europe, for instance, had a record year in heat pump sales in 2022, with more than 40 percent growth over the previous year, according to the International Energy Agency.
In Europe, sales of air-to-water versions compatible with standard radiators and underfloor heating systems surged by more than 50 percent.
Meanwhile, pump purchases in the US surpassed those of gas furnaces.
However, despite a general economic slump, sales in China, the world's largest heat pump market, remained stable.
To achieve all existing national energy and climate targets worldwide, IEA said heat pumps will need to provide roughly 20 percent of global heating needs in buildings by 2030. If new installations continue to increase at the same rate as they did over the last two years, the target is almost there, it added.
However, heat pumps cover approximately 10 percent globally of the heating needs in buildings today when employed as the primary heating technology. This equates to over 100 million households, implying that heat pumps now service one in every ten homes that require major heating.
Many more families, however, use heat pumps only for part of the winter or as a supplement to heating in locations where they are primarily used for cooling buildings, IEA’s report added.
If the world wants to attain net zero emissions by 2050, IEA said sales must increase by more than 15 percent annually this decade. Energy efficiency retrofits must also be accelerated to guarantee that new heat pumps installed in existing buildings are as efficient and not excessive as possible.
This will reduce consumers' upfront and operating expenses and lessen the strain on power systems, especially when combined with smart controls for flexible operation.
Heat pump installations continue to focus on new buildings and existing single-family houses. If strong growth is to continue, multistory housing buildings and commercial spaces must be prioritized.
The IEA believes global emissions will peak in 2025 as surging energy prices due to the Russian invasion of Ukraine propel investment in renewables.
Energy Wrap — QatarEnergy expands operation with Shell deal; Iraq’s March oil revenue at $7.4bn
Updated 02 April 2023
ARAB NEWS
RIYADH: Qatar’s state-owned oil firm QatarEnergy has inked a deal with global energy giant Shell to acquire a 40 percent working interest in the C-10 block located offshore Mauritania, a press statement said.
It noted that the C-10 block covers a total area of approximately 11,500 square kilometers and is located about 50 kilometers off the coast of Mauritania in water depths of about 50 to 2,000 meters.
While QatarEnergy will hold a 40 percent working interest in the exploration and production agreement, Shell will have a 50 percent interest and Société Mauritanienne des Hydrocarbures the rest 10 percent interest.
“We’re excited about the opportunity to participate in Mauritania’s upstream sector, which further builds on our exploration footprint in Africa, and we look forward to a successful exploration program,” said Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and President and CEO of QatarEnergy.
He added: “We are delighted to have the opportunity to work with our strategic partner Shell and with SMH. We also look forward to collaborating with the Mauritanian government and thank them and our partners for their valuable support and cooperation.”
On March 29, QatarEnergy inked a deal to acquire stakes from ExxonMobil in two Canadian offshore exploration blocks.
In January, the petroleum company also signed an agreement with France’s TotalEnergies and Italy’s Eni to join them in exploring natural gas in Lebanon’s Mediterranean waters.
Iraq’s March oil revenue exceeds $7 billion
Iraq’s March oil revenue was $7.4 billion, with an average price per barrel of $73.37, the oil ministry said.
Iraqi oil exports averaged 3.255 million barrels per day in March, the country’s oil ministry said on Saturday.
Iraq exported 3.295 million bpd the previous month.
Meanwhile, on April 1, Iraqi Prime Minister Mohammed Shia Al-Sudani inaugurated the Karbala oil refinery, which has a production capacity of 140,000 bpd, his office said in a statement on Saturday.
Oil settled up on Friday
Oil prices rose by more than a dollar a barrel on Friday to record their second-straight week of gains, as supplies tightened in some parts of the world and US inflation data indicated price rises were slowing.
For June delivery, the most actively traded Brent futures settled up $1.29, or 1.6 percent, at $79.89 a barrel. Brent futures for May delivery, which expired upon settlement, gained 50 cents, or 0.6 percent, to settle at $79.77 a barrel.
West Texas Intermediate crude for May delivery settled higher by $1.30, or 1.8 percent, at $75.67 a barrel, gaining about 9 percent for the week.
Iraq Kurd oil exports to resume Monday under Baghdad supervision
Updated 02 April 2023
AFP
BAGHDAD: Iraq's autonomous Kurdistan region is to resume oil exports through Turkey Monday but in the future they will be supervised by the federal government in Baghdad, officials from both sides said.
The outcome, thrashed out in talks between federal and regional officials, spells the end of independent oil exports by the Kurdish regional government and marks a clear limit to its autonomy.
Ankara had stopped handling Iraqi Kurdish oil last month after an international tribunal ruled in a nine-year-old dispute that Baghdad was right to insist on overseeing all Iraqi oil exports.
"Sales of Kurdistan crude will be managed from now on by the State Oil Marketing Organization," a federal government official told AFP on Saturday.
A "joint committee" formed by the federal and regional governments will supervise the export process, the official added.
Revenues will be paid into an account "overseen by Baghdad", a Kurdish official said.
The halt to exports through a pipeline to the Turkish Mediterranean port of Ceyhan had left foreign oil firms with nowhere to pump Kurdish oil.
Norway's DNO, one of the main firms operating in Iraqi Kurdistan, announced it was halting production at its wells.
Prior to Ankara's action on March 25, the autonomous region was exporting roughly 450,000 barrels per day of crude.
Oil exports are the key revenue source for both the federal and regional governments and their management has long been a sensitive topic in relations.
The Kurdistan government sees Baghdad as trying to profit from the region's resources, while the Iraqi government argues it should enjoy sovereign control over all of the country's oil production.
Iraq, the second largest producer within the Organization of the Petroleum Exporting Countries, exports an average of 3.3 million bpd.
Gradual energy transition holds the key to a sustainable future
COP28 will help shine the spotlight on the region’s ambitious decarbonization goals
Updated 01 April 2023
Nirmal Narayanan
RIYADH: Concerns about energy security and the need to accelerate decarbonization seem to be growing with 2023 rolling on, as geopolitical issues that came to the fore last year show no sign of abating.
Amid the ongoing energy crisis catalyzed by these tensions, countries are realizing the necessity to embrace renewables as dependence on traditional energy imports could be impacted due to various factors including the internal affairs of energy exporting nations.
Even though energy transition is very much necessary to warrant a better future, a sudden transformation to renewables is expected to do more harm than good, especially considering the fact that the energy crisis has been battering the world’s poorest countries for several years.
“The IEA estimates that some 75 million people who recently gained access to electricity are likely to lose the ability to pay for it, meaning that for the first time since we started tracking it, the total number of people worldwide without electricity access has started to rise,” Abdullah Al-Abri, a consultant at the International Energy Agency told Arab News.
He added: “To solve the issue of the energy crisis in the poorest nations, the global community needs to invest more in sustainable energy solutions and provide competitive capital and expertise.”
The vitality of a gradual energy transition
Experts believe that a gradual energy transition, where both renewables and traditional sources operate, hand-in-glove could be the solution to smoothen the journey toward sustainability.
“There will be a transition period when investment in both fossil fuel and renewables must continue concurrently, without losing sight of the fact that renewables are the future of global energy,” Ian Harfield, managing director of ENGIE Energy Solutions, Gulf Cooperation Council, told Arab News.
There will be a transition period when investment in both fossil fuel and renewables must continue concurrently, without losing sight of the fact that renewables are the future of global energy.
Ian Harfield, Managing director of ENGIE Energy Solutions, Gulf Cooperation Council
He added: “To fortify energy systems against extreme weather, we need to diversify the renewable energy mix, incorporating hydroelectric, solar, wind and green hydrogen, and large-scale storage systems.”
Manish Laligam, managing director, of the Middle East Region of Protiviti Member Firm, shares identical views and said: “To satisfy the pledges under the Paris Climate Accord, developing countries where energy consumption is increasing faster than the rest of the globe are considering a combination of gas and renewable energy sources.”
Earlier in March, Francesco La Camera, director-general of the International Renewable Energy Agency, told Arab News divestment from fossil fuels must be a gradual process.
“We have to understand that the old system, the one that is centralized and based on fossil fuels, cannot shut down in a day,” La Camera told Katie Jensen, host of the Arab News program “Frankly Speaking.”
“There will be a slow decline of oil and gas. And to maintain a smooth decline of oil and gas, we need some investment again in oil and gas. If not, there will be a disruption.”
Al-Abri opined that it is necessary to develop climate-resilient fossil fuels to ensure a smooth energy transition.
“The question is not about fossil fuels versus new energies – the matter is more of how to develop fossil fuels that are climate resilient while ensuring that new energies are also developed to mutually satisfy the growing demand and climate agenda,” said Al-Abri.
Meanwhile, experts believe that the ongoing geopolitical tensions including the Ukraine conflict are expected to accelerate the energy transition journey.
COP28 will help shine the spotlight on the region’s ambitious decarbonization goals. (AP)
“Geopolitical tensions have only underscored the critical need for renewable energy — green energy sources are more resilient to global disruptions. International efforts are then needed to set benchmarks, share insights, and promote industry best practices,” noted Harfield.
In January, during the World Economic Forum, Fatih Birol, executive director of the International Energy Agency, warned the world is going through an unprecedented energy crisis.
“Our world has never seen an energy crisis of this depth and of this complexity. The biggest driver of renewable energy growth today is energy security,” Birol said.
COP28 holds crucial significance
Amid all these sustainability efforts and ongoing energy transition, the UN Climate Change Conference, also known as COP28, is set to be held in Dubai from Nov. 30 to Dec. 12 this year.
The upcoming conference is expected to have a crucial significance in the energy transition journey as countries in the Middle East and North Africa region — spearheaded by Saudi Arabia — are playing a crucial role in turning the earth green with their net-zero targets.
“COP28 will help shine the spotlight on the region’s ambitious decarbonization goals, most aligned with national socioeconomic visions,” said Harfield.
Laligam opined that COP28 will accelerate the region’s plans to achieve a clean economy, driven by renewable energy sources, technology developments, and climate-smart solutions.
HIGHLIGHT
Amid the ongoing energy crisis catalyzed by these tensions, countries are realizing the necessity to embrace renewables as dependence on traditional energy imports could be impacted due to various factors including the internal affairs of energy exporting nations.
“Many Middle Eastern countries have developed the Hydrogen Leadership Roadmap to position their nation as top hydrogen suppliers by fostering low-carbon sectors. Across the past two years, numerous solar, wind, and battery storage projects have been started across the Middle East,” Laligam added.
In March, Issam Abu Suleiman, regional director of the Gulf Cooperation Council at the World Bank, said COP28 will provide an opportunity to move to an economic path of green growth which could ultimately diversify the economy while making a positive impact on the climate.
Abu Suleiman further added that the conference is expected to provide chances to push toward green technology and carbon sequestration investments, which are crucial for the world to achieve net-zero emissions by 2050.
This year’s COP is also expected to include oil and gas companies in discussions, as without their contribution, it will be difficult to achieve a sustainable future.
During a recent exclusive interview with Arab News, Fahad Alajlan, president of the King Abdullah Petroleum Studies and Research Center, also reiterated this view and said that an inclusive approach is required to smoothen the energy transition journey.
“In the past, oil and gas companies have been excluded from discussions. If we look at emissions today, more than 50 percent comes from the energy sector. So, it is very important that we involve oil and gas companies in this discussion, to become part of the solution rather than demonizing and excluding them,” said Alajlan.
Al-Abri said that COP28 would play a key role, not just in the MENA region, but the entire world.
“To the region, I think COP28 could shed light on how producer economies are working to address the climate agenda through the energy transition, de-emissionization practices, and the incorporation of innovation and solution integration. COP28 could also be instrumental to the world as I think the hydrogen and new energies agenda would be more emphasized and opportunity for cross-learnings on how to establish the low-emission industrial clusters,” noted Al-Abri.
As the biggest oil-producing nations in the Middle East are spearheading the energy transition globally, the world will witness more monumental milestones in this journey, which will ensure that the future is green.
Saudi Arabia and UAE leading the MENA region in becoming AI hub
Market for the advanced technology in the region will witness a compound annual growth rate of 47.8 percent
Updated 01 April 2023
Arab News
RIYADH: The artificial intelligence market in the Middle East and North Africa region is expected to grow from $500 million in 2020 to $8.4 billion by 2026, according to a new report.
The findings by firm Research and Markets suggests that the market for the advanced technology in the region will witness a compound annual growth rate of 47.8 percent, with Saudi Arabia and the UAE leading from the front.
According to the report, the value of the artificial intelligence market in the UAE alone will reach $1.9 billion by 2026, representing 36.2 percent growth.
Business leaders in the Middle East region also consider AI crucial in the coming years for their operational growth. According to a study conducted by global consultancy firm Proviti Middle East, more than 80 percent of CEOs in the region believe the technology is critical to the future of their businesses, and over 70 percent of them are investing in the booming sector.
Understanding the potential of AI, Saudi Arabia is heavily investing in the industry, as the Kingdom’s sovereign wealth fund announced in 2019 a $500 billion investment in AI and other emerging technologies over the next decade.
The Kingdom has also launched several initiatives, including the establishment of the Saudi Arabian Data and Artificial Intelligence Authority and the National Data Management Office, to accelerate the implementation of AI in the Kingdom’s various sectors.
The UAE is also boosting its involvement in the technology, and has launched the National Artificial Intelligence Strategy 2031, with its focus on attracting talent for jobs of the future, funding research and innovation hubs, and developing appropriate infrastructure and data ecosystems along with a balanced legislative environment.
As nations and companies across the world steadily embrace AI, a recent report from investment bank Goldman Sachs suggested it could take the place of 300 million full-time jobs around the world.
FASTFACT
Understanding the potential of AI, Saudi Arabia is heavily investing in the industry, as the Kingdom’s sovereign wealth fund announced in 2019 a $500 billion investment in AI and other emerging technologies over the next decade.
The report predicted that administrative and legal sectors will be at the highest risk, with 46 percent of administrative jobs and 44 percent of legal positions at risk of replacement by AI.
According to the report, physically intensive jobs are expected to face less risk, with construction facing a 6 percent threat, whereas maintenance is at 4 percent threat.
“The combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers raises the possibility of a labor productivity boom like those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer,” stated the bank in a note titled The Potentially Large Effects of Artificial Intelligence on Economic Growth.
The Goldman Sachs report, however, added that technological advances which initially replace workers will create employment growth in the long term.
“Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,” said the report.
Goldman Sachs further pointed out that the roll out of AI could boost labor productivity, and push global growth up by 7 percent year-on-year over a 10-year period.
