Companies in KSA warn Aramco fuel price hike to curb earnings

A number of Saudi Arabian companies issued a warning on late Wednesday and Thursday that the fuel price hike by Aramco might curb their earnings, Reuters reported.

Aramco informed the companies in the Kingdom of the price hike earlier this week, to be effective from January first.

The company increased retail diesel prices for 2024 by 53 per cent to reach 1.15 riyals ($0.3067) per litre, being the company’s third increase since 2016.

The Saudi companies are shedding a light on the impact the increase in prices could have starting the first quarter, and that businesses are looking for ways to enhance their efficiencies to offset the rising costs.

Nama Chemicals, Saudi Ceramic, Qassim Cement, Saudi Aramco Base Oil Co., and Rabigh Refining and Petrochemical are among a number of companies that said they would be affected by the price increases.

Middle East Company for Manufacturing and Producing Paper said the financial impact of the price hike will lead to an increase of about three per cent in total annual sales costs.

Saudi Industrial Investment Group also said that its subsidiaries face higher production costs this year due to the fuel increase.

Saudi Arabia’s Tadawul stock index dropped by 1.6 per cent in early trading on Thursday.