Jim_Krane]_Energy_Kingdoms__Oil_and_Political_Sur

(John Hannent) #1
134SHIFTING GEARS IN SAUDI ARABIA

had risen, as had the price of water used for “misting” the cows to cool
them. “I have no choice,” he said.^41 Inflation did bump abruptly upward
that January, but Saudi central bank data revealed it to be a one- time
price adjustment that lasted about a month.
By 2018, following the second round of energy price increases, the
Saudi demand conundrum finally began to appear resolvable. The elite
who upended previous price reforms had lost their touch. With MbS’s
oversight, new prices were brusquely shoved through. In February 2018,
most Saudis I met with had grown used to the notion that energy ser-
vices had to be paid for. “We Saudis have been getting a fantastic deal
for more than 40 years,” said the owner of a real- estate business. “We’re
not used to paying more. But we must.” Surprisingly, a succession of
Uber drivers I queried seemed unfazed by the new gasoline prices. Not
everyone was so blasé. A prominent Shia from the Eastern Province, a
young man who asked that his name not be used, reported high levels
of dissatisfaction in poorer Qatif. “The government is asking far too
much, too quickly. They cannot keep pushing people so hard. Reforms
are necessary. But the poor are not ready for this.”^42
Sweeping price reforms in Saudi Arabia represented another sort of
milestone: a recasting of commonly held assumptions about energy in
the world’s fossil fuel heartland. Dubai demonstrated that prices could
be changed without triggering riots. But post- oil Dubai operates under
a different set of conditions than does Saudi Arabia and the other oil
monarchies. Dubai extracts rents from foreign businesses and from the
expatriate residents that dominate its population. The presence of so
many foreigners— all paying at least triple the citizen price for electric-
ity and water— insulates the Dubai government against an outcry by
citizens.
Reforms in Saudi Arabia were more politically fraught. Ordinary Sau-
dis considered themselves stewards of the kingdom’s colossal resource
base, and many appeared to believe that their special status should be
reflected in the prices and availability of energy. When prices rose, many
Saudis took to social media to voice their dissatisfaction with King
Salman’s energy policy. Some railed against the government or even crit-
icized individual ministers by name, a risky tactic in an autocracy

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