Long accustomed to cheap utilities and some of the lowest petrol prices in the world, Saudis woke to a shock today as authorities made massive subsidy cuts after falling oil prices caused a record deficit.

In a clear departure from its decades-old generous welfare system, Riyadh announced prices would rise on fuel, electricity, water and even plane tickets and cigarettes.

Residents of the oil-rich Gulf kingdom have long enjoyed cheap prices on basic goods and services, but officials made clear that was no longer sustainable after the stunning drop in crude prices over the last 18 months.

"We have to rationalise unnecessary spending... This requires changes to focus on essential expenditures," Finance Minister Ibrahim al-Assaf was quoted as saying Tuesday by the Al-Eqtisadiah newspaper. After years of high spending, authorities moved swiftly to impose unprecedented cuts after announcing yesterday a 2015 budget deficit of USD 98 billion -- the largest in Saudi history and a whopping 15 per cent of Gross Domestic Product (GDP).