Riyadh – Mubasher: Saudi Arabia plans to reduce the subsidy on gasoline and jet fuel prices during the coming two months, Bloomberg reported on Monday, citing informed sources as saying.

“The government is taking its first step in removing subsidies for some fuel,” director of economics research at Gulf Research Center John Sfakianakis stated.

“Over the long term, the economy will become more efficient user of energy in general and gasoline, in particular,” Sfakianakis added.

The Saudi government plans to raise gasoline prices by 80% for octane-91 to cope with international prices, the agency added, citing an informed source who preferred not say their name.

Moreover, the Saudi government plans to postpone raising the prices of other energy sources until the beginning of 2018, the source added, noting that the authorities are expected to make a final decision on the price hike plan in September or October.

 “Gasoline and jet fuel would undergo immediate, one-time increases under the Saudi plan, while the government would raise prices of other fuels gradually between 2018 and 2021,” Bloomberg cited the unnamed source as saying.

“The government may put a ceiling on increases in diesel and heavy fuel oil to limit any negative impact on the economy, as both fuels are used for power generation and industrial activities,” the source told the news agency.

Electricity prices were also likely to rise as power providers pass on “at least some” of the fuel price hike to consumers, they added.