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Tue 12 Dec 2017 06:05 PM

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Saudi Arabia set to begin cash transfers to poorer citizens

Payments under the so-called Citizen's Account will start on December 21

Saudi Arabia set to begin cash transfers to poorer citizens
(HASSAN AMMAR/AFP/Getty Images - for illustrative purposes only)

Saudi Arabia is set to start monthly cash payments in a program to compensate low- and middle-income families hit by government austerity measures.

Payments under the so-called Citizen’s Account will start on December 21, the cabinet said Tuesday in a statement carried by the Saudi Press Agency, and will be reviewed quarterly. Ministers also ratified a gradual change in prices of energy and electricity products, which will start January 1.

The cash payments are intended to offset the impact on family incomes as the government implements an economic overhaul triggered by the sharp drop in oil revenue in 2014.

To avoid a rundown on savings, authorities canceled projects deemed unnecessary, cut costly subsidies and plan to introduce a value-added tax.

Gasoline prices are set to increase by about 80 percent, while jet fuel prices will be raised to international levels in one go, according to a person with knowledge of the matter.

Gasoline and other fuels such as diesel, kerosene and heavy fuel oil will see incremental price increases over several years, the person said.

Authorities first reduced subsidies in December 2015 after years of debate. Officials later said they would eliminate them entirely by 2020.

Finance Minister Mohammed Al-Jadaan said in an interview in October that prices of some subsidized domestic energy products will rise to international levels later than previously seen.

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