Saudi Arabia has approved a reform plan to reduce dependence on oil

Saudi Arabia will maintain the same level of oil production until 2020 in accordance with the approved by the government new plan of economic reforms — the National transformation program is to reduce the dependence of the Kingdom on oil, according to Bloomberg.

As follows from the draft programme that was circulated among journalists in Jeddah (Saudi Arabia), the world’s largest oil exporter will stick with production at 12.5 million barrels per day before 2020.

With reference to the state TV of Saudi Arabia the Agency notes that the program was approved by the Cabinet of Ministers on Monday, 6 June.

In accordance with an approved program shall reduce subsidies on water and electricity 200 billion riyals by 2020. Refining capacity in the Kingdom by 2020 will grow to 3.3 million barrels a day. At the end of last year the volume of oil refining was at 3.1 million barrels per day, mentioned in the annual report of the state oil company of Saudi Arabia Saudi Aramco, published last month.

According to the plans, by 2020, Saudi Arabia will also be producing 4% of its energy from renewable sources.

Deputy crown Prince Mohammed bin Salman in the beginning of this year, announced the plan for a global reform of the country’s economy to make it less dependent on revenue from oil sales amid falling prices due to global oversupply. The plan also includes the sale of shares in Saudi Aramco by the end of 2018 in an initial public offering (IPO).

A reduction in government spending and reductions in subsidies will help reduce fiscal deficit in Saudi Arabia to 13.5% of GDP this year compared to last increased in 16.3 per cent of GDP, announced on 25 April the International monetary Fund.