Abstract
Producing construction materials requires a great amount of energy, and in Saudi Arabia, this production currently entails the use of substantial amounts of liquid fuels. Liquid fuels are mostly sold at below-market prices domestically, and thus result in large opportunity costs for the government. Saudi Arabia’s interests reside in displacing higher-value liquid fuels with more appropriate alternatives. The Saudi government plans to encourage the displacement of oil by reforming the below-market oil prices. Alternatives could include other fuels and more energy-efficient manufacturing processes. This paper investigates, the cost implications of switching existing fuels or processes for individual firms and the government.Â
