Along the King Fahd highway in downtown Riyadh, signs of the country’s wealth glitter and dazzle. Monuments include the massive Kingdom Centre – instantly recognisable by the giant bottle-opener feature formed by its two wings – and the beautiful and futuristic Faisaliyah building. New ones are still rising, like the King Abdullah financial district, still under construction: a reminder of the fat years of high oil revenues under the previous monarch.

On nearby Tahliya Street, lined with young Saudi men watching black-robed, headscarfed women saunter past, crowds throng into American-style shopping malls flaunting the world’s priciest and most luxurious brands.

Saudi wealth – whether in downtown Riyadh or Knightsbridge – is highly conspicuous. And they have the colossal Saudi Aramco oil corporation to thank for it.

Locals were stunned by the sudden news of the possible sale of part of the company that has been synonymous with their country’s history almost since its foundation. Uncertainty about exactly what it would mean has not been laid to rest by the cautious statement confirming the impending plan to float the business later issued from Aramco’s headquarters in the eastern province of Dammam.

There was also concern that news of the momentous decision was first aired in an interview given by the powerful deputy crown prince, Mohammed bin Salman, to foreign media. “Aramco is our spine and they suddenly announce this!” exclaimed Professor Fawziah al-Bakr, an education expert and women’s activist.

Aramco’s history is the story of the “discovery and development of the greatest energy reserves the world has ever known and the rapid transformation of Saudi Arabia from desert kingdom to modern nation state,” the company says. Its pledge has always been to “maximise the value of the country’s petroleum reserves for the benefit of the kingdom’s citizens”. Exactly how that will be done if foreign investors can buy shares is a troubling and unanswered question, say critics.

But a 75% plunge in global crude prices over the last 18 months to $30 per barrel – caused by a downturn in demand and a supply glut that Saudi Arabia and fellow Opec members have refused to address in their determination to drive US fracking rivals out of business – has caused financial pain to producing nations around the world, who had grown used to funding pretty much their entire economies and social programmes on black gold.

The Saudi budget deficit rocketed last year to 15% of gross domestic product and more than $100bn of the country’s $650bn of foreign reserves has already been used to fill up gaps left by depleted oil revenues.

The 2016 income and expenditure plan has involved a huge rise in the price of petrol, electricity and water along with a pledge to introduce a value added tax of 5%, together with tariffs on sugary drinks and tobacco.

The 60% increase in petrol prices – to 16p a litre – has shocked many Saudis but not all motorists. “Yes, the cost of petrol has gone up,” said a Bangladeshi taxi driver stuck on King Fahd highway. “But it is still probably the cheapest in the world.”

Mohammed, a Saudi government official, was more worried about future rises than this one. But the increase has triggered alarm, with some car owners rushing out the night before it took effect to fill their tanks and save the equivalent of a few pennies.

At least Saudis, who live in an autocratic state where free education and other social benefits have effectively been traded by unspoken compact for political freedom, are not alone. Last week, the neighbouring Gulf state of Bahrain, just off the coast of Saudi’s eastern province, also raised the price of fuel by 60% – for the first time in 33 years. Oman had already done the same.

The possible selloff of at least part of Aramco, previously considered the country’s crown jewel, has stunned the global energy and investment sectors as much as locals.

Sunset over Riyadh, with the evening light reflecting off the Kingdom Centre. Photograph: David Kirkland/Design Pics/Corbis

One Wall Street report claimed an American financial adviser was forced to stop his car because he was laughing so much from sheer incredulity when the Aramco float news broke. But plans for an initial public offering by what may be most secretive – but almost certainly the most valuable – company in the world have been confirmed by its chairman, Khalid al-Falih.

“We are considering … a listing of the main company and obviously the main company will include upstream,” he said last week, thereby indicating that the flotation plan could give access to the country’s 260bn barrels of oil reserves and 263 trillion cubic feet of gas.

Among the more than 100 oil and gas fields controlled by Aramco – which began life as the California-Arabian Standard Oil Company in 1933 – are Ghawar, the world’s largest onshore oil location, plus Safaniya, the biggest offshore field in the world.

The scale of the Aramco empire dwarfs every other corporation in the world. Its oil assets alone are 10 times more than those held by the world’s largest publicly quoted oil company, ExxonMobil. If the Texas-based business has a stock market value of $400bn, that would make Aramco’s oil assets potentially worth $4tn (£2.7tn).

Energy analysts admit they find it impossible to accurately calculate the exact worth of a company that boasts of producing 9.5m barrels of oil a day – one in every eight of the world’s production. But some estimates go as high as $10tn. That is 10 times the combined value of Apple and Alphabet (the new parent company of Google).

They know Aramco has huge oil and gas reserves, a raft of refineries and other business interests, but details are scant. The company does not publish its accounts or even its revenues, never mind its profits.

What is known about Aramco by anyone outside the company tends to come from bland information provided by its official websites or an annual review of “facts and figures” – the last one covering 2014.

You will find no mention of the flotation proposal on its website. The latest bit of news concerns what appears to be a low-key joint venture with a German chemical company called Lanxess. There is no date given for when it was announced, nor who to contact should one require more information.

A plan to float even a relatively small slice of the business would change all that. “You cannot take public funds (foreign investment) without sufficient operating and financial results being made available,” says Fadel Gheit, a veteran oil analyst with the Oppenheimer brokerage in New York.

“And you would not choose to float a company when commodity prices are so low. But the Saudis are clearly in need of money and part of it is their own fault. They ignored plenty of warnings that US shale production was on its way into the market. It is too late to stop that now.”

What Aramco’s annual review does say is that the company – alongside its mountainous oil and gas reserves – controls more than 3m barrels a day of refining capacity, both inside Saudi and abroad.

There are some joint refining ventures with foreign oil companies inside the Middle Eastern kingdom, such as the Saudi Aramco Shell Refinery Company, which operates a plant in Yanbu on the north-west Saudi coast with Royal Dutch Shell.

There are similar local refining partnerships with Exxon, Total of France and Sinopec of China, while Shell has the most substantial joint venture with Aramco outside Saudi in its Motiva Enterprises operation in the US.

More recently there have been moves to establish chemical plants at refineries through tie-ups with the likes of Dow Chemical of the US and Sumitomo Chemical of Japan. The American firm has a joint venture, Sadara, building a facility at Jubail while the Japanese are involved in a joint venture at the Petro Rabigh plant on the Red Sea.

In addition there are oil exploration agreements inside Saudi with Shell and for gas development with Russia’s Lukoil, Sinopec and a consortium of Italy’s ENI and Spain’s Repsol. Industry experts say these deals give very little real access to rich resources and have produced little of benefit to the foreign companies so far.

Deputy crown prince Mohammed bin Salman announced news of the float in an interview. Photograph: Charles Platiau/Reuters

Aramco until recently owned a fleet of very large tankers to ship oil abroad through a separate subsidiary it established, called Vela International Marine. But the business – one of the biggest of its kind in the world and which still handles much of Saudi’s oil exports – was recently transferred to the ownership to the Saudi national shipping company.

Aramco continues to keep a network of international offices in locations such as Paris, the Hague and London. It also keeps a research base in Aberdeen, centre of UK North Sea activity.

The assumed wisdom about Aramco is that it is relatively well run but is used as a personal piggy bank by the ruling family as well as an income to fund government social and other policies. There are question marks over why the company is reported to be running four Boeing 747s and four other jets as well as a number of football stadiums around the country.

Aramco’s crude is especially attractive because it almost gushes out of the ground with barely the prod of a stick. Operating costs of $12 per barrel make it the cheapest in the world after Kuwait and five times cheaper than the UK North Sea.

Shell, Total and Sinopec would almost certainly look at taking a stake in any Aramco IPO for strategic reasons, but whether sovereign wealth funds or big western pension funds would queue for a stake is less certain at a time of low crude prices.

Gheit thinks they might, but traditional institutional investors would need to see audited financial information and know they would be able to pursue legal remedies in the event of a dispute.

Any float will ultimately come down to price and (royal) pride. But in the meantime expect to see western investment bankers, lawyers and PRs – who want a slice of what will be very lucrative advisory work in the run-up to any IPO – joining the queue on King Fahd highway.

THE COST OF FALLING PRICES

Standard Chartered last week issued the most gloomy forecast yet on the future price of oil: $10 a barrel. What impact would such a fall have on North Sea companies, the consumer and the economy?

OIL INDUSTRY

Up to 65,000 jobs have already been lost from the British offshore oil industry since the cost of crude fell from a peak of $115 per barrel in June 2014 to its latest level of $30. A further decline to $10 would clearly turn a cull into a massacre, not least because the North Sea is a high-cost place to operate, with the break-even price for many fields around $60.

Just last week BP unveiled plans to axe a further 4,000 jobs – most over the next 12 months – with 600 of them in Aberdeen. Shell has promised to cut 2,800 if, as expected, its merger with BG goes through in the next few weeks.

Around the world, 68 oil projects with a combined investment cost of $380bn have been dumped over the last year, according to Edinburgh-based global oil consultancy Wood Mackenzie.

Thirty-seven north American oil and gas producers have filed for bankruptcy, says Texas-based law firm Haynes and Boone, while analysts have warned half of US shale drillers could be out of business if the slump continues.

Dividend payments from Shell and others could be slashed if oil skids further and a major new round of takeovers would almost certainly begin. Sub-$10 oil in the late 1980s led to BP buying rival Amoco for $42bn and a series of other mega-mergers as companies sought to bulk up while cutting jobs and offices.

CONSUMERS

Motorists have already benefited from lower petrol prices, which are now below £1 a litre in some places – but they still do not reflect the true cost of supplies, and $10 oil would bring more benefits.

The last time that price was reached – during the height of the Asian financial crisis in 1998 – petrol prices fell to around 86p per litre. Oil companies argue that the vast majority of the petrol price is made up of taxes but a further collapse in crude values would produce a glut of cheap refined products and pressure to pass on cuts.

Many international gas contracts are also tied to oil prices, and wholesale prices have fallen by at least 30% over the last 18 months. These lower costs have not been fully passed onto householders. Energy regulator Ofgem said on Friday that the “big six” UK suppliers are overcharging “for the vast majority of people”.

Despite the growth in wind and solar for providing electricity, gas is still the key fuel for energy generation, whether in the home or the power station. Even without lower crude prices, there have been growing expectations that power prices will at least remain flat from now until the end of the decade.

Petrol prices have dropped below £1 per litre in some locations. Photograph: Paul Ellis/AFP/Getty Images

THE ECONOMY

A fall in the oil price is the same as a tax cut for consumers. It means they have more to spend on other goods and services, though there is some evidence that UK car owners are spending some of their windfall on extra petrol as they increase the miles they drive.

A slump to in the oil price to $10 will not mean a big fall in pump prices because of the tax levied - but businesses will get a big lift from cheaper oil products. It cuts the cost of transport and there are also benefits from cheaper plastics, fertilisers and synthetic fabrics.

The downward pressure on inflation will persuade the Bank of England to keep interest rates lower for longer. That is bad news for savers, but good for mortgage payers and high-street spending.

The government’s hope will be that consumers spend more on goods and services produced by UK businesses, boosting growth. But Britain is an open economy, with trade accounting for around a third of economic activity, so if extra cash goes on imports it will widen the trade deficit.

Scotland will suffer as more oil firms pull out of North Sea production or lay off staff. From the Treasury’s point of view, the bad news is the big loss in tax revenues that inevitably follows, though this should be compensated by tax receipts from a higher growth rate.

Terry Macalister