Since Mohamed bin Salman assumed the mandate of his father, King Salman bin Abdulaziz, after he overthrew his uncle, and established the Saudi political, economic and social vision according to his whims; the state has been in constant decline, especially in the economic sector.
Since the beginning of 2020, the deterioration of the economies of Saudi Arabia, and its effects have become evident through the closing of private sector companies and the termination of contracts for those who pay them.
The economy of Saudi Arabia suffers from a decline in its growth rates, for several reasons, the most important of which is the political crisis that the Kingdom is going through after Mohammed bin Zayed controlled its political affairs and decisions, involved it in the war in Yemen, killed Khashoggi and supported armed movements in Syria and Libya, which drained the Kingdom’s financial funds.
These failed and destructive policies were followed by the crises of the spread of the Corona virus, the little oil production, and its declining prices, which prompted Saudi Arabia to take shocking austerity measures to balance the decline in income, and the budget deficit from the pockets of the people, who are suffering from high prices and lack of resources.
International oil prices fell by less than half until the price of a barrel reached $26, due to the increase in production and the decline in demand due to the suspension of movement and the closure of factories due to the spread of Corona, which affected the budget of Saudi Arabia, where reports of the Ministry of Finance indicated that the Kingdom’s oil revenues declined during the first 3 months of 2020 to 245 on an annual basis to $34 billion.
The Saudi Rabigh Refining and Petrochemical Company “Petro Rabigh”, which is a company specialized in refining oil and producing chemicals extracted from it, and is a joint venture between Saudi Aramco and Japan’s Sumitomo Chemical, was established in 2005 with a capital of $2.33 billion. It announced financial losses of 3 billion and 781 million riyals (one billion and 8 million dollars) in 2020, an increase of 595% over its losses achieved during 2019, when the Saudi company recorded a net loss of 544 million riyals (about 145 million dollars) during the year 2019.
In justifying these losses, the company attributed the losses to the company’s industrial complex stopping work for two consecutive months during 2020, to carry out general maintenance for the entire complex’s equipment.
The company also said in a statement, that the recession of the global economy, widespread market uncertainty, and the continuation of the Corona pandemic, has led to a decrease in demand for products, and consequently, prices fell further.
Petro Rabigh also indicated that the fourth quarter of 2020 witnessed a slight improvement in the profit margin, due to the improvement in the oil and chemicals market conditions, and the management plan to reduce the operating costs, as the company said that it had achieved profits of 61 million riyals during the fourth quarter of 2020, compared to 877 million riyals during the same quarter of 2019, which specialists considered a loss rather than a profit, as the company claimed.
This severe loss of the economy raises many questions, most notably, how long would it continue and where is the problem?
