A number of Gulf Cooperation Council countries have started implementing plans to lift subsidies for fuel and free up prices in the domestic market to rationalize government spending in the wake of falling oil prices.
There are signs that the Saudi government is also considering a similar move.
If subsidies are removed, fuel prices will go up and, subsequently, the prices of all other commodities will increase.
The reality is the Kingdom is different in many respects from other GCC countries for a number of reasons.
Firstly, other GCC countries had increased salaries of their employees when the price of oil went up.
Anticipating a day when oil prices could drop, the Kingdom, instead of increasing salaries, directed increased oil revenues to finance giant development projects.
Today, when fuel costs increase in other GCC nations due to the removal of government subsidies, their citizens will not be greatly affected. The impact will be minimal.
Contrary to this, the impact of such a move on Saudi citizens will be direct and painful. It may consume half the salary of many citizens, while one half is already being spent on rent payments.
Secondly, the majority of residents in other GCC countries are foreigners. The lifting of fuel subsidies may be a wise move, as expatriates are the ones who benefit from such subsidies.
In the Kingdom, however, Saudi citizens constitute the majority of the population.
While other GCC countries are considering issuing their citizens with subsidized coupons to purchase fuel, this idea would not be practical in the Kingdom where the number of nationals is more than 20 million.
Thirdly, other GCC countries have proper public transportation systems. Citizens with a lower income, students and foreign workers all have a cheaper alternative means of transport.
The Kingdom to date has virtually no public transport system, except the minibuses run by individuals drivers who will become increasingly nervous with the rising prices of fuel.
For these reasons, I hope that those who support the idea of freeing up fuel prices in the neighboring countries and ask our government to do likewise would be wiser.
They should realize that such a decision would have adverse effects for thousands of Saudi families, some of whom have more than one car, not because they are ostentatious but because they have a real need.
To the supporters of ending fuel subsidies in the Kingdom I would like to say there are other important issues that need our suggestions. Then why do they focus on the removal of the fuel subsidy?
