Tabuk Agricultural Development Company (“Tabuk Agriculture”) announced in an official statement on the Saudi Stock Exchange website (“Tadawul”) that it had received an official notification from Saudi Arabian Oil Company (“Saudi Aramco”) stating that the prices of diesel used in the company’s operational and production processes would be adjusted starting from January 1, 2026.
In detailing the financial impact of this adjustment, the company explained that the planned increase in fuel prices will be reflected in production costs, with the company estimating the expected financial impact at approximately 1.9% of total cost of revenues, based on the audited annual financial statements for the fiscal year 2024. The company confirmed that it is continuously working to study ways to mitigate this financial impact by increasing operational efficiency.
Proactive steps within the liquid fuel displacement program
In a related development, and to reduce overall reliance on liquid fuels, Tabuk Agricultural Development Company took significant strategic steps in 2025, including signing a pivotal agreement with the National Grid Company, a subsidiary of the Saudi Electricity Company. This agreement aims to implement a project to construct a dedicated electricity transmission station, aligning with the national strategy of the "Liquid Fuel Shift Program.".
Context of economic reforms and the energy system
This measure comes within the broader context of structural reforms in Saudi Arabia's energy sector, which aim to gradually revise energy prices to align with global benchmarks and to encourage the industrial and agricultural sectors to adopt more efficient technologies. These adjustments are an integral part of the Kingdom's Vision 2030 objectives, which seek to maximize the utilization of natural resources and enhance economic efficiency.
Environmental and operational dimensions
Tabuk Agricultural Development Company's transformation through grid connection extends beyond financial considerations to encompass significant environmental and operational dimensions. Switching from diesel to electricity directly contributes to reducing carbon emissions from combustion processes, reinforcing the company's commitment to environmental standards and supporting Saudi Arabia's green initiatives. Furthermore, reliance on the electricity grid enhances operational reliability and sustainability compared to the logistical and technical challenges associated with traditional diesel generators.
