The CEO of Riyadh Cement, Shuaial Al-Ayidh, stated that Aramco‘s decision to raise fuel prices at the beginning of 2025 was surprising in terms of timing but expected in principle. Al-Ayidh indicated that the increase would impact production costs but would not undermine the company’s ability to compete globally.
Impact of Fuel Price Increase on Costs:
The increase affected various types of fuel, with heavy oil and diesel prices rising by 47%, while the crude oil used by Riyadh Cement saw a 26% increase. Despite this, Al-Ayidh confirmed that local fuel prices remain below global averages, noting that prices will eventually align with international levels, requiring factories to prepare for competition.
Government Support and Continued Growth:
Al-Ayidh emphasized that fuel is still subsidized by the government through the “Industrial Competitiveness Program,” which supports factories in multiple ways, such as improving operational efficiency and rationalizing energy consumption. He added that the cement sector remains active, relying on government support and major projects in the Kingdom, such as large-scale construction initiatives.
Financial Outlook for 2025:
Expectations indicate that the impact of the Saudi fuel price increase will be reflected in the first quarter of 2025, with cost increases potentially reaching 10%, especially for cement companies. However, Riyadh Cement confirms its ability to handle these challenges and maintain its competitive position in the global market.