Saudi Arabia is currently undergoing a series of fuel price reforms. These reforms are aimed to adjust below-market domestic prices to approach the prices that would be discovered on a market. The first round of reforms took place in 2016. Several rounds have been taken place since, with the last happening in January of 2025.
Modeling analysis has shown that the advent of inexpensive renewable electricity technologies have enabled fuel price reforms in Saudi Arabia. Without renewable technologies, like solar PV, CSP, and onshore wind turbines, the costs of reforming fuel prices on the Saudi energy system would’ve been substantially higher. The case is shown by three results: the equilibrium price that the model finds for Saudi natural gas supply and demand, the amounts of oil used by the Saudi energy system, and the marginal costs to generate one unit of electricity in 2040.
For a case with renewable electricity (base case, called Renewable) and one without (called No Renewable), this is the set of results:
Equilibrium price for natural gas (higher prices imply higher costs for natural gas consumers, like utilities and industry):
Domestic oil use:
Marginal electricity generation costs:
