SHIFTING GEARS IN SAUDI ARABIA125Muhammad bin Salman followed up with an announcement that, over
the next five years, energy subsidies would be totally abolished.^19
As the Saudi public digested the news, the authorities gave a grim
demonstration of their appetite for dissent. On January 2, a day after the
price reform took effect, the government announced it had executed
forty- seven Saudi prisoners, including the outspoken Shiite religious
sheikh Nimr al- Nimr. The executions overshadowed the subsidy retrac-
tions, causing an international uproar. Enraged Iranians overran Saudi
diplomatic missions in Iran, leading Riyadh to break off diplomatic ties.
At least one observer speculated that the executions were timed to obscure
the kingdom’s increase in energy prices.^20
In December 2016, al- Falih added further detail to the reform plans.
The energy ministry would gradually raise energy prices to international
levels and, in the future, compensate Saudi citizens with monthly cash
deposits.^21 The kingdom began registering people in a new distribution
scheme called the Citizen’s Account program. The amount of compen-
sation would vary according to income, with the poorest Saudis getting
100 percent of the subsidy value and the very richest receiving nothing.
Foreign residents who had previously benefited from subsidized energy
would also receive nothing.
As it turned out, the success of Iran’s subsidy reform had not escaped
notice in the kingdom. The MbS plan resembled that of Ahmadinejad,
except that the Saudi treasury would capture a larger portion of energy
sales revenue, because cash handouts would be tilted toward the poor.
Iran made the costly blunder of giving out payments indiscriminately.
The Saudi reform was the most sweeping to date in the Gulf mon-
archies. Residential electricity and water prices rose for the first time
ever. Water charges increased by more than 400 percent for the aver-
age household, and the price for electricity went up for consumption
beyond 4,000 kWh per month. Water and electricity rates for com-
mercial and industrial consumers increased at all tiers of consump-
tion. Commercial water users in the kingdom were handed rates
more than double those in Arizona.^22 Saudi Arabia also raised prices
on gasoline, diesel, and other refined oil products by an average of
122 percent.