Saudi energy minister blames lack of investment for fuel price spike

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RIYADH, May 9 (Reuters)Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday that the gap between crude oil prices and jet fuel, diesel and gasoline prices was around 60% in some cases due to lack of investment in refining capacity.

The prince, speaking at an aviation summit in Riyadh, said the world needed to look at energy security, sustainability and affordability as a whole.

“All mobility fuels have skyrocketed (…) and the gap between crude prices and these products is in some cases 60%,” he said..

The minister did not give comparative figures. But, as an example, the average refining margin of the major energy company BP BP.L was 18.9% in the first quarter of this year, compared to 8.7% in the first quarter of 2021.

Asked whether geopolitical events in Europe would accelerate the transition to cleaner energy or hinder it in the medium term, the minister said: “I think it has allowed us to see how aspirations…can be compromised by the realities of the day.”

Even before the Ukraine crisis, he added, the “la la land scenario on net zero had been marked by so many realities”, including the cost.

When discussing sustainability targets, the minister used the phrase ‘low carbon’ rather than ‘zero carbon’, saying it was ‘the difference between la la land and reality’.

Saudi Arabia and other resource-rich developing countries have often pushed back on calls for a rapid shift away from fossil fuels, arguing for a more orderly transition.

(Reporting by Aziz El Yaakoubi in Riyadh and Lina Najem in Dubai Writing by Ghaida Ghantous Editing by Mark Potter)

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