Reports say Saudi Arabia’s giant oil company Aramco, which is responsible for a bulk of the kingdom’s finances, is planning to increase fuel prices in the country after a slump in international oil prices caused it to post massive losses in the second quarter of this year.
Saudi state TV said on Monday that Aramco will increase the price of gasoline delivered to motorists in Saudi Arabia in August.
The report said the price of 91 octane grade gasoline will rise by nearly 11 percent to 1.43 Saudi riyals while 95 octane grade type of the fuel will be offered at 1.60 riyals, a surge of nearly 10 percent compared to the previous months.
The price hikes come after Aramco posted a massive loss of $18.1 billion for the three-month period to the end of June mainly as a result of low oil prices in international markets that has been exacerbated by the spread of the coroanvirus pandemic.
The loss amounts to 73 percent of reduced profit for Aramco when compared to figures recorded for similar quarter in 2019.
Despite the loss, Aramco authorities have said they will stick to their pledges of distributing dividends to shareholders who bought stocks in the company in an initial public offering in the Saudi bourse in December.
The authorities would not elaborate how they would finance the profit to shareholders as the company faces growing problems funding ambitious plans by Saudi Arabia’s government at a time of increased economic pressure on the kingdom.
Lower income for Aramco has caused a significant decline in Saudi Arabia’s foreign currency reserves on which authorities have increasingly relied for expensive arms purchases and helping proxy groups and governments in the region.
The reserves have shrunken by nearly 40 percent in five year to stand at just below $450 billion in the summer of 2020, according to recent estimates.