Household consumers, however, will not be affected by the increase in charges.
The new tariff were recommended by the Saudi Electricity and Cogeneration Regulatory Authority.
“The charges were kept as they are for the household sector without change,” Minister of Water and Electricity Abdullah Al-Hussayen said at a press conference in Riyadh on Saturday.
Al-Hussayen said the tariff for commercial and government sectors per kilowatt / hour, will be based on three bands. In the commercial sector the tariff for the band from 1 to 4,000 kw / hour will be 12 halalas. The same band in the government sector will be charged 26 halalas.
The second band from 4,001 to 8,000 kw / hour in the commercial sector will be charged 20 halalas while for the government sector it will be 26 halalas.
Above 8,000 kilowatt/hours the tariff will be 26 halalas for commercial and government sectors.
The minister further clarified that the tariff for industrial consumption has been divided on the basis of the months with varying levels of consumption. While consumption is higher in summer, it is lower in winter.
The Authority has allowed incentives to encourage the industrial sector to shift consumption loads from the peak period to off-peak periods with lower prices.
“This is intended to encourage industrial and commercial sectors to offset periods of peak load, and offer them encouragement for consumption at off-peak hours in certain periods of the year when the power consumption is under pressure,” Al-Hussayen said.
He said the annual growth in power demand required adding 3,000 megawatts to the power generation capacity each year, which currently stands at 40,900 megawatts. He added that the increased generation level for peak months remained idle in the off-peak months.
He also said the SEC needed SR30 billion for investments until 2019.
The move will raise by 9.6 percent the average price of electricity sold to non-household users but it would still remain 3.5 percent below its actual production cost, Abdullah Al-Shehry, governor of the regulatory authority, told reporters on Saturday.
The government granted the cash-strapped SEC a SR15 billion soft loan in April to support its finances.
Households account for 53 percent of power consumption in the Kingdom and much of that power is used for air-conditioning.
