Market Research Saudi: Aramco’s Pandora box

Market Research Saudi – The Kingdom made an impressive movement direction in 2016, increasing prices on energy products across the board, but in 2015 the prices are getting a decrease. The Saudi’s prices increasing 39% from 2015-2016. Even though the data cannot be the right answer for an Issue which is hit, Saudi Arabia.

According to Market Research Saudi, an issue of energy subsidies in Saudi Arabia it was related to a social unrest which is the retracted of energy subsidies is the main trigger, Saudi Arabia should look at a “mirror” the same problem which once goes in another country it could on regimes that attempted similar austerity measures in OPEC member states, Indonesia and Venezuela was overthrown by their citizens, Saudi Arabia can learn from its efforts which can have the same impact as the example of the two countries.

The policy of Saudi Arabia’s kingdom which is like “Pandora box” it will depend on the value of Aramco on public trading shares and the ability of its company to maximize a profit. The foreign investors will demand to Saudi Aramco to start treating domestic consumers as like a foreign people too if the result of Saudi Aramco’s market share prices made a disappointment.

The Investor interests will bump against funding the Kingdom budget, but its influence is not so significant even Aramco still retains 95% of Saudi Arabia shares. The company will continue to bankroll the Kingdom’s budget. The decision that made by Saudi Arabia to go along with OPEC would make a problem, because the Private Shareholders might be anger which is the assets are sitting idle, instead of producing oil and profits, according to report of Market Research Saudi.

An average of 5% a year, the Saudi Arabia oil consumption increased since 1970. The best record in the 2000s, the oil domestic demand grew an average of 6 percent per year. In the 2010s, the oil market is decreasing and slowed, the overall it’s only 4%. The potential investors which can negotiate a Saudi oil demand only grow by 1 percent that thing happens because of an increased local price as well as an increase in natural gas, which substitutes for oil in electricity generation.

The big attraction of Aramco is the dividend payment expected to flow, shareholders, if Aramco does not to cut the dividends, the foreign investors could be the biggest problem. Elsewhere, Aramco showed that the company is trying actively to close their role for nations building projects around the Kingdom, such as erecting museums, stadiums, and universities.

On the other side, there have been rumblings among Saudi’s citizens who against selling off a portion of the company. They looked as the foreign interference in the Kingdom’s sovereign affairs.

There are a lot at stake, The IPO Aramco could make Saudi Arabia economic increased but on the other hand IPO insert the foreign Investors who had a disadvantageous policy which could make Saudi citizens resent it because could make gasoline and electricity expensive.

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