Top oil exporter Saudi Arabia is investigating the smuggling of subsidised fuel sold for domestic consumption to international markets, sources said on Sunday.

Refined products in the kingdom, as in most countries in the world's top oil exporting region, are sold cheaply to stimulate the local economy. Resale of subsidised fuel has been going on 'for a long time' a Saudi oil official told Reuters.

The kingdom has formed a government committee to investigate the sales, he added.

One case under investigation involved the sale of kerosene for use in domestic industry that was later exported, diplomatic sources said.

Rapid fuel demand growth is a concern for top Saudi officials, who have said that if it goes unchecked, the kingdom will have less crude available for lucrative international
markets.

Domestic energy demand was expected to rise from about 3.4 million barrels of oil equivalent per day (boepd) in 2009 to 8.3 million boepd in 2028, Saudi Aramco's chief executive Khalid Al-Falih said earlier this year.

Improvements in energy efficiency could cut this in half, he said.-Reuters