Saudi Arabia looks beyond oil, easy profits

There's no place on Earth that takes oil and fuel for granted. Not even Saudi Arabia. Reports say the country is shifting its economy away from oil and oil profits. In 2015, 70 percent of Saudi Arabia's profits came from oil, and falling prices haven't been gentle on its economy: in 2014, a barrel of oil cost $100, and current prices are slightly under half that. A few months ago, the Saudi government agreed to raise gasoline prices by at least 50 percent, from as little as 60 cents per gallon, as subsidies had to be slashed. They have cost the country $61 billion per year.

Selling just 1% of Aramco's shares would be the biggest IPO in history.

The plan forward, called Vision 2030, includes state-owned oil company Aramco's shares getting sold to help create a sovereign wealth fund worth two trillion dollars. The company is valued at $2.5 trillion dollars, and the plan is to sell less than five percent of that. The Deputy Crown Prince Mohammed bin Salman said that selling just one percent of Aramco's shares would be the biggest IPO in history. The Prince, who is second to the throne and serves as the defense minister, says the reforms would still go ahead, even if oil prices recovered from the current slump.

There will also be steps taken to diversify the current economy, including investing in mining. Currently, almost 90 percent of Saudis are employed by the government, health care and schooling is free and there is no income tax; these have run up a deficit of $100 billion and the IMF has predicted that the country will run out of money in less than five years if oil prices stay the same. Even Saudi Arabia cannot run on cruise control when it comes to oil.

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