The Riyadh diesel crisis has inflicted staggering financial losses on factory owners, forcing some to shut down their new production lines. Others have resorted to the black market to secure sufficient quantities of diesel to keep their new production lines operational. Tankers which previously sold for SR2,500 each can now cost anywhere from SR7,500 – SR15,000.

The crisis started after the Riyadh Traffic Department enforced a new traffic system, which restricts the movement of trucks and fuel tankers during peak traffic hours. Under the system, trucks are only allowed into the city between 11 p.m. and 6 a.m.

Factory owners are afraid of being forced to resort to redundancy, a measure that may lead to the termination the services of many Saudi nationals. A majority of the factory owners in the Kingdom had increased their production lines in the past two years to meet the growing demands for their products, which can range from cars to jewelry or children’s toys, in the local market.

According to Ahmad Al-Rajhi, Chairman of the Industrial Committee at the Chamber of Commerce and Industry in Riyadh, “The shortage of diesel fuels is mainly due to the fact that the expansion in the productivity of the local factories is not accompanied by a similar expansion in the refineries’ capacity.”

“This has been the case for some time. Although production is underway in more than one refinery in Yanbu and Jubail this hasn’t helped solve the crisis as the continued shortage in the refineries’ capacity is crippling the factories.” He added that current government’s mega-projects have aggravated the problem due to the large quantities of diesel demanded.

In a meeting held by the National Committee on Land Transport at the Council of Saudi Chambers headquarters in the capital on Wednesday, chairman of the committee, Saud Al-Niviei, announced the committee’s intention to bring the fuel issue before competent authorities in order to find a solution.

Al-Niviei stressed that the investors in the land transport sector are suffering from the traffic department’s new system as drivers are forced to wait on the city’s outskirts for hours on end. The conditions have become so bad that many drivers are unwilling to go to Riyadh and this has in turn increased transport costs.

Al-Niviei said he feels that system is inconsistent with the guidelines of the Custodian of the Two Holy Mosques King Abdullah who does not wish for residents to be burdened by an undue increase in the price of goods or services.

“It sounds odd that a country the size of the Kingdom and the largest oil producer in the world suffers from a drastic shortage in the main petroleum by-product,” added Chairman Al-Rajhi.