Saudi Arabia will gradually increase its crude oil production to the current maximum potential of 11.9 million barrels a day, the English-language newspaper Arab News reportedly yesterday.

The paper quoted government sources as saying the production increase is aimed at neutralizing oil price increases agreed on by 11 other members of the Organization of Petroleum Exporting Countries at their meeting in Qatar last month.

Saudi Arabia and the United Arab Emirates refused to go along with the 11, who decided on a 10 per cent price increase on Jan. 1 and another 5 per cent July 1. Saudi Arabia insisted on a single increase of 5 per cent on Jan. 1. Experts have predicted a one cent increase in the cost of gasoline in the United States for every 5 per cent increase in the price of crude.

The Saudis have told the Arabian American Oil Co., the government-controlled company that produces most of the country's crude oil, to lift the former production ceiling of 8.5 million barrels a day, the paper said. ARAMCO sources said that production had reached 8.8 million barrels a day by late December and was likely to go even higher in January. ARAMCO's current production capacity is reportedly 11.9 million barrels daily.

The paper said OPEC was considering an emergency meeting to discuss the split in the oil group.