Here’s What You Need To Know About 2016 Saudi Budget

Due to the reduction of oil export prices globally; some measures have been taken by The Kingdom’s officials to overcome the budget deficit due to high expenditure in the coming years. The main way of doing will be cutting down on Government subsidies, which means that the public will have to pay more for some necessities, which they didn’t have to before because the Government had it covered. These subsidy adjustments will take place over the next 5 years.

The measures the Government has already taken, or plans to take, are:


  • Increase in Petrol Prices:

Octane 91 has increased from 45 halalas to 75 halalas (50% rise) per liter. Octane 95 has increased from 60 halalas to 90 halalas (67% rise) per liter.


  • Value Added Tax:

Saudi Finance Ministry plans to introduce a value-added tax on items just like the tax system in the rest of the Gulf region.

  • 5% on electricity, oil and gas, entertainment, eating at restaurants and cafés, and luxury goods such as SUVs and jewelry.
  • 100% on tobacco and energy drinks.
  • 50% on soft drinks.


  • Travelling Tax for International Passengers:

There has been a raise in tax charged on international passengers traveling to and from the kingdom to SR 87 from the current SR 50 from 1st January. Transit passengers are currently exempted from those fees.


  • Rise in Electricity Tariffs:

A rise in electricity prices is to be implemented because of an increase in tariffs.

Residential (For above 4000 kw/hr):

  • From 12 to 20 halalas for 4001-6000 kw/hr.
  • From 15 to 30 halalas for 6001 and above kw/hr.


  • From 12 to 16 halalas for 1-4000 kw/hr.
  • From 20 to 24 halalas for 4001-8000 kw/hr.
  • From 26 to 30 halalas for 8001 and above kw/hr.


  • 18 halalas on average for every kw/hr.

Government sector:

  • From 26 to 32 halalas on average for every kw/hr.


  • Rise in Water Tariffs:

Just like electricity, an increase in water tariffs has already been in place. In order to reduce water consumption, the Ministry of Water and Electricity announced the change in pricing which will be SR 9 per cubic meter for both water and sanitation services and SR 6 per cubic meter in for water only. The cost will depend on the water consumption amount and the number of meters.

Note: This increase only applies to Government, industrial and commercial use.

  • Increase in Prices of Other Fuels:

Prices of natural gas, kerosene, Arabian light and heavy crude oil, heavy fuel oil, ethane, and butane have also been revised. The new prices for these products will be effective from Jan. 11.

More information can be found in the following links:

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