Friday, September 23, 2016

Falling Oil Prices Hurts Saudi Middle Class

Mohammed Idrees used to travel to London once or twice a year, but these days the Saudi civil servant is asking his wife and children to cut back on using the family car to save fuel and has installed a solar panel for the kitchen to reduce electricity costs.
For decades, Saudi nationals such as Mr. Idrees enjoyed a cozy lifestyle in the desert kingdom as its rulers spent hundreds of billions of dollars of its oil revenue to subsidize essentials such as fuel, water and electricity.
But a sharp drop in the price of oil, Saudi Arabia’s main revenue source, has forced the government to withdraw some benefits this year—raising the cost of living in the kingdom and hurting its middle class, a part of society long insulated from such problems.
I can't blame the Saudi government for not providing subsidies when the cash isn't available, and I certainly can empathize with Mr. Idrees.  When the government money runs out, and the welfare goes away, everyone has to cut back. I get it.  The Saudi government can't afford to subsidize everyone.

I wonder when our government is going to make the same decision?  What can't go on forever, won't.


JayNola said...

The middle class down here is getting rough because of low oil prices too. I may see it more because i was in the business before my former employer reduced their shoreside by 3/4 but running down highway 90 it's like a ghost town. I know there's a shale play up there, I hear that's terrible too.

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