ALBAWABA – Saudi fuel subsidies exceeded those of all other major economies within the Group of 20 (G20) on a per capita basis in 2022, according to an International Monetary Fund (IMF) report released earlier this month.
Overall Saudi fuel subsidies soared over the past two years, as global fossil fuel subsidies hit $7 trilling in 2022, with China ranking the biggest spender in absolute terms, at $2.2 trillion.
Saudi Arabia spent almost $7,000 per person, equivalent to about 27 percent of economic output, across both explicit and implicit energy subsidies, Bloomberg reported.
Total Saudi fuel subsidies totalled $253 billion last year, as indicated in the IMP report.
In 2021, the government set a cap for the domestic cost of gasoline to soften the impact of higher living costs on citizens, just months before prices soared to over $100 a barrel.
Saudi Arabia ranked top of the list on a per capita basis in terms of fuel subsidies - Shutterstock
Saudi fuel subsidies have made Saudi gasoline one of the cheapest in the world, according to Bloomberg.
On August 17, the IMF called on Saudi Arabia to cut government subsidies and protecting the welfare of low-income households through increased targeted social spending, instead of subsidizing fuel.
Implicit subsidies, which the IMF defined as undercharging for the environmental cost of fossil fuel burning and lost tax revenue, made up the bulk of the global total. Explicit subsidies, or selling fuels as below supply costs, had a share of just 18 percent.
