Chemanol expects SAR 30 mln financial impact after Saudi subsidy cuts

Methanol Chemicals Co. (Chemanol) expects a financial impact of SAR 30 million per year after the kingdom raised electricity tariffs and gas prices to $1.25 per British thermal unit (MMBTU) from $0.75 MMBTU, the company said on Tuesday in a statement to Tadawul. 

The impact of the energy price hikes, which represent a five percent rise year-on-year in costs, will show in the 2016 financial results.

Argaam reported on Monday that the Saudi cabinet decided to hike domestic power, water, and fuel prices to achieve efficiency in energy use and conserve natural resources.

The company added it will take the procedures necessary, including enhancing efficiency and cutting expenditures, to adjust to an environment of lower product prices which were knocked off by slumping crude and fluctuations in economic conditions.

Sahara Petrochemical Co. also released a statement to Tadawul, informing shareholders that the financial impact of the energy hike would be announced as soon as possible, but will be reflected on 2016 financial results.