Fuel, feedstock price hikes to raise sector efficiency: Alkhorayef

Bandar Alkhorayef, Minister of Industry and Mineral Resources

Bandar Alkhorayef, Minister of Industry and Mineral Resources, said that the recent decision on hiking feedstock and fuel prices is part of a previously-announced program to adjust energy prices.  

In an interview with Al-Arabiya TV, the minister added that the measures taken regarding prices consist of two parts: The first part related to raising efficiency in a number of sectors that use liquid fuel, mainly the cement sector, as we seek to remove liquid fuel from the industry, to enable the industry to raise efficiency.

There Ministry of Industry has a program, in cooperation with the ministries of energy and finance, to address this and replace liquid fuel with alternatives, most notably gas, as liquid fuel is one of the least efficient sources of energy and has the most harmful effects, such as the environmental effects resulting from its use. Furthermore, the quantities of liquid gas used, which amount to about one million barrels per day, can be exploited for export, according to the minister.

Alkhorayef added that, as for the other part, which is related to feedstock prices, despite the price increases, the Kingdom is considered one of the best places for petrochemical industries, as prices have been carefully studied are investors are able to compete globally and build new capabilities. He also said that there will be a program to spur manufacturing industries, where the industry strategy is focused on creating manufacturing industries instead of exporting raw petrochemical materials.

The Kingdom currently exports 85% of its production of these materials and wants to transfer part of it internally, said the minister, adding that the changes in feedstock prices will be leveraged by passing an advantage to the manufacturing industry.

This program aims to re-inject the amounts resulting from the price hike to support the infrastructure, such as the gas network to deliver gas to factories, to cover the largest number of factories and meet future demand, Alkhorayef stated.