Abu Dhabi revises tariffs for electricity and water

13 November 2014

Emiratis living in the capital will be required to pay for water for the first time

Abu Dhabi will implement revised tariffs for electricity and water from 1 January 2015, with Emiratis living in the capital required to pay for water for the first time.

The changes to the tariff structure have been announced by the Regulation & Supervision Bureau (RSB), the independent regulatory body for the water, wastewater and electricity sectors in Abu Dhabi, in partnership with Abu Dhabi Distribution Company (ADDC) and Al-Ain Distribution Company (AADC), as part of efforts to reduce consumption and improve efficiency of the emirate’s utilities.

In addition to the introduction of water charges, Emiratis exceeding set usage rates of electricity will face a 10 per cent rise in the cost of power. The cost of water and electricity will increase significantly for expatriates living in the capital, with the cost of water rising by at least 170 per cent.

Under the revised tariffs, Emiratis living in Abu Dhabi will be required to pay AED1.70 ($0.46) for every 1,000 litres of water used a day, for usage up to 700 litres a day in apartments and 7,000 litres in villas, rising to AED1.89 a litre for higher water usage. With local residents currently not paying for water, the reformed tariffs mark a major change in the emirate’s utilities market.

Under the new tariffs, water charges for expatriates living in Abu Dhabi have been increased by 170 per cent, with the current AED2.20 a 1,000 litres rate rising to AED5.95 for usage up to 700 litres a day in apartments and 5,000 litres a day in villas. Expatriates will face a higher tariff for exceeding this usage, but the rate has not yet been announced.

To encourage more efficient use of power, under the new tariffs, there will be no change in the price of electricity for Emiratis using up to 30 kilowatt hours (kWh) a day in apartments and 400kWh a day in villas, with the rate remaining flat at AED5 fils a kWh (f/kWh). However, for UAE citizens exceeding this consumption, the rate will rise 10 per cent to AED5.5 f/kWh for electricity used above this amount.

For expatriates, the cost of electricity will rise by about 40 per cent, from 15 f/kWh to 21 f/kWh from 1 January for consumption up to 20kWh a day in apartments and up to 200kWh a day in villas. The tariff for usage above this rate is yet to be announced.   

The cost of water and electricity will also increase for commercial and industrial users, but prices for both will remain flat for agricultural users.

Although marking a major change in government policy, the revision of tariffs in Abu Dhabi is not unexpected, and has been at the forefront of the agenda of utility providers for several months. Earlier this month, the Washington-based IMF’s head of mission for the UAE said the emirate was looking at ways to reform subsidies to reduce budgetary spending. Abu Dhabi has some of the highest rates of electricity and water consumption per head in the world.

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