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Price reforms without additional investments in the non-energy sector may not be beneficial to households unless they receive cash transfers or some other monetary compensation. There is a trade-off between revenue-recycling policies that directly support household income (i.e., cash transfers), and policies that contribute to increased activity in the non-energy sector as a result of higher investment. Full price-deregulation would reduce Saudi Arabia's energy-related carbon dioxide (CO2) emissions by around one third by 2030, compared with our baseline. Key Points price reforms reduce domestic consumption and, therefore, increase oil exports. International oil prices have the potential to adjust to increases in market supply and, in turn, impact Saudi Arabia's oil revenues.

The King Abdullah Petroleum Studies and Research Center (KAPSARC) is a non-profit global institution dedicated to independent research into energy economics, policy, technology and the environment across all types of energy. KAPSARC's mandate is to advance the understanding of energy challenges and opportunities facing the world today and tomorrow, through unbiased, independent, and high-caliber research for the benefit of society. KAPSARC is located in Riyadh, Saudi Arabia.

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