DUBAI: Saudi Arabia, the world’s largest oil exporter, set a cap on local gasoline prices for July to help alleviate rising living costs and boost the economy, official media reported on Saturday.

Fuel prices will be capped at 2.18 riyals (58.1 cents) per litre for the 91 octane grade, and at 2.33 riyals per litre for the 95 octane variety, effective July 10, according to a decree issued by King Salman.

Saudi Arabia’s annual inflation accelerated for the second consecutive month in May, reaching 5.7% compared with 5.3% at the end of April as the prices of food and beverages and transport rose, according to official statistics.

The government has been working to bring domestic fuel prices in line with international levels, part of reforms aimed at easing the burden of subsidies on state finances, improving energy efficiency and cutting consumption.

Saudi Arabia’s economy shrank 4.1% last year, but the International Monetary Fund expects real GDP, an inflation-adjusted measure, to grow 2.1% this year as it recovers from the pandemic’s impact.