{"id":14615,"date":"2015-11-21T09:20:25","date_gmt":"2015-11-21T14:20:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14615"},"modified":"2015-11-21T09:20:54","modified_gmt":"2015-11-21T14:20:54","slug":"riyadh-feels-the-pinch-the-true-cost-of-saudi-subsidies","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14615","title":{"rendered":"Riyadh Feels the Pinch: The True Cost of Saudi Subsidies"},"content":{"rendered":"<h3 class=\"article-title\"><a href=\"http:\/\/www.geopoliticalmonitor.com\/riyadh-feels-the-pinch-the-true-cost-of-saudi-subsidies\/\" target=\"_blank\">Riyadh Feels the Pinch: The True Cost of Saudi Subsidies<\/a><\/h3>\n<div class=\"article-body\">\n<p><img decoding=\"async\" class=\"img-thumbnail alignright\" title=\"Saudi Water Tower, cc Flickr Andrew A. Shenouda, modified\" src=\"http:\/\/cdn4.geopoliticalmonitor.com\/wp-content\/uploads\/2015\/11\/Saudi-Water-Tower-300x270.jpg\" alt=\"Saudi Water Tower, cc Flickr Andrew A. Shenouda, modified\" \/>In downtown Riyadh, SUV-populated intersections and lushly landscaped parks leave little indication that Saudi Arabia is rapidly depleting its oil and water resources. The Saudi predilection for gas-guzzling vehicles and water-intensive leisure spaces is hardly surprising- governmental subsidies have long obscured the true cost of these resources.<\/p>\n<p>Saudis pay about 60 cents a gallon at the pump, which makes the average cost to fill a tank less than $20. Electricity, powered primarily by oil, costs only USD 0.6 per kilowatt hour. Drinking water supplied to Saudi households is so cheap that it is practically free. These low commodity rates are viewed by many as traditional perks of Saudi birthright, and Riyadh has traditionally shied away from raising tariffs and risking public ire. Placating the masses through subsidies and handouts, after all, has been a successful strategy for maintaining the House of Saud\u2019s enduring grip on power in a region plagued by uprisings and political volatility. Saudi Oil Minister Ali al-Naimi recently reaffirmed that there is no \u201cdire need\u201d for the Kingdom to cut energy subsidies in response to rumors that Riyadh was discussing adjustments to the subsidy program.<\/p>\n<p>Yet a system of high subsidies is ultimately unsustainable for the Kingdom. Most obviously, the costly system is contributing to a rapid depletion of governmental coffers. With oil prices still slumping, Saudi Arabia faces skyrocketing debt and depleted monetary reserves. Equally important \u2013 high subsidies distort the true cost of resources, encourage overconsumption, and foster a public misperception that energy and water supplies are inexhaustible.<\/p>\n<p><em>Depleting Monetary Resources<\/em><\/p>\n<p>The Kingdom\u2019s energy subsidy program runs up an annual bill of over $107 billion, or 13.2% of the country\u2019s total GDP. This year has seen plenty of additional discretionary spending by Riyadh as well. When King Salman ascended the throne in January, Riyadh doled out $32 billion in handouts as a gesture of goodwill.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Riyadh Feels the Pinch: The True Cost of Saudi Subsidies In downtown Riyadh, SUV-populated intersections and lushly landscaped parks leave little indication that Saudi Arabia is rapidly depleting its oil and water resources. The Saudi predilection for gas-guzzling vehicles and water-intensive leisure spaces is hardly surprising- governmental subsidies have long obscured the true cost of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[5547,353,6618,10690,1453,681,1246,701,1052],"class_list":["post-14615","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-energy-subsidies","tag-gdp","tag-house-of-saud","tag-monetary-resources","tag-resource-depletion","tag-resources","tag-riyadh","tag-saudi-arabia","tag-subsidies"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14615"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14615\/revisions"}],"predecessor-version":[{"id":14617,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14615\/revisions\/14617"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}