Saudi energy minister blames lack of investment for surge in fuel prices

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Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Monday the gap between crude prices and prices for jet fuel, diesel and gasoline was around 60% in some cases due to lack of investment in refining capacity.

The prince, speaking at an aviation summit in Riyadh, said the world needed to look at energy security, sustainability and affordability as a whole.

“All mobility fuels have skyrocketed … and the gap between crude prices and these products in some cases is actually 60%,” he said.

The minister did not give comparative figures. But, as an example, the average refining margin for energy major BP was 18.9% in the first quarter of this year compared with 8.7% in the first quarter of 2021.

Asked whether geopolitical events in Europe would speed up the transition to cleaner energy or hinder it in the medium-term, the minister said: “I think it provided us with a reality check to how aspirations … can be compromised by the realities of the day.”

Even before the Ukraine crisis, he added, the “la la land scenario about net-zero had been smacked with so many realities,” including cost.

When discussing sustainability goals, the minister used the phrase “low carbon” rather than “zero carbon,” saying that was “the difference between la la land and reality.”

Saudi Arabia and other resource-rich developing nations have often pushed back against calls for a rapid move away from fossil fuels, arguing for a more orderly transition.
Source: Reuters (Reporting by Aziz El Yaakoubi in Riyadh and Lina Najem in Dubai Writing by Ghaida Ghantous Editing by Mark Potter)