Saudi Arabia, the world's biggest oil exporter, has raised petrol prices by about 50% at home by cutting subsidies in the wake of a record budget deficit of $98 billion due to a slump in global crude oil prices.
Petrol prices are set to go up by up to 50% from Tuesday, according to a royal decree by the Kingdom of Saudi Arabia. The move is aimed at curtailing the whopping subsidy on fuel for its 30 million people. It was the first budget by King Salman.
According to IMF, subsidies cost the Saudi kingdom about $83 billion in 2014.
The overall spending cut will be 14% in 2016 in the wake of expected fall in revenues as a result of the crude oil price slump.
The government's expenditure in 2016 will be 840 billion riyals, down from 975 billion riyals in 2015.
Falling crude oil prices have resulted in oil revenues dropping by 23% this year for Saudi Arabia as compared to last year.
The country derived about 77% of its total revenues from oil in 2015. Oil prices have plunged to $37-38 per barrel these days from a five-year high of $125 per barrel in March 2012.
Saudi Arabia, a member of the oil cartel OPEC, said that oil revenues, which make up 77% of the total revenue figure for 2015, are down 23% compared to last year.
The $98 billion deficit is almost 15% of its GDP. The kingdom's budget deficit was $87 billion last year.
India has been a big beneficiary of falling crude oil prices, with the union ministry of petroleum and natural gas body, Petroleum and Planning Analysis Cell estimating the country's oil import bill for 2015-16 to come down to $69 billion from $113 billion last year. The country imports about 80% of its crude oil requirements.
