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Saudi Arabia saved more than $ 200 billion from the energy reform plan


© Reuters. FILE PHOTO: Saudi Finance Minister Mohammed al-Jadaan holds a press conference to announce the country’s 2021 budget, in Riyadh


By Davide Barbuscia

DUBAI (Reuters) – Saudi Arabia could save more than $ 200 billion over the next decade by replacing liquid fuels used for domestic consumption with renewable energy and gas sources, minister finance said, as the kingdom seeks to cut costs to finance investments.

The world’s top oil exporter in recent years has embarked on an ambitious reform program aimed at modernizing the economy, creating jobs and reducing dependence on oil revenues.

Finance Minister Mohammed al-Jadaan said: “One initiative that we are about to complete is liquid mobility.

“This program will represent government savings of about 800 billion riyals ($ 213.34 billion) over the next 10 years and can be used for investment.”

This month, Saudi Arabia signed power purchase agreements with seven new solar projects, part of a plan to optimize the mix of energy used to generate electricity.

“Instead of buying fuel from the international market for $ 60 and then selling for $ 6 to Saudi utility companies, or use some of our quotas in OPEC to sell for 6 dollars, we will actually consume at least 1 million barrels of oil per day Jadaan said equivalent for the next 10 years and replace it with gas and renewable energy.

Heavily hit by falling crude prices and last year’s coronavirus crisis, the kingdom recently announced plans to speed up domestic investment, in a trillions of dollars spent by the giant. state oil giant Aramco (SE 🙂 and sovereign $ 400 billion take the lead. , Public investment fund.

In an attempt to move the burden of some planned investments out of the coffers, some companies have been asked to reduce the dividends they pay the government to increase capital expenditure.

“From now to 2025 and possibly up to 2030, fiscal sustainability is our top priority. We believe that until all the goals that Vision 2030 are met until the vision of 2030 is achieved,” Jadaan said. We need to maintain fiscal sustainability and control government spending “.

Vision 2030 is Crown Prince Mohammed bin Salman’s plan to shake up Saudi Arabia by removing the economy from oil and building new industries and large projects with the private sector to create goods. million jobs.

The unemployment rate stood at 12.6% by the end of 2020, down from a record high of 15.4% in the second quarter of last year when the economy was in a pandemic, but much higher than the 7% rate. that this kingdom wants to achieve by 2030.

“We are maintaining our unemployment target for 2030 but since we are not out of the forest it is difficult to say what the unemployment rate will be for 2021,” Jadaan said.

“Our goal is to reduce the number so we will end the year below the level we ended in 2019, before COVID, but I can’t tell you this is bound to happen.”

(1 dollar = 3.498 riyals)

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