Saudi Aramco said it was raising domestic gasoline prices on Sunday, with 91-grade increased by 6% to SAR1.53 per litre from SAR1.44 and 95-grade by 4% to SAR2.18 from SAR2.10. The company said in a statement that the adjustments were in line with the government’s plans to reform energy and water prices, and that they were subject to changes in global exports prices. The price hikes comes within the government’s plans to adjust fuel prices on a quarterly basis based on changes in international oil prices. This is the second adjustment this year and the largest, the previous increase was c2%. The price hikes are unlikely to result in any material shift in Saudi’s deflationary environment this year (annual headline inflation stood at “-1.5%” in May), but it is not necessarily supportive for the consumer sentiment normalisation we have been seeing so far this year, in our view. 

Mohamed Abu Basha