“The revised water tariff will only be applicable to the non-residential sector without any increase in the water tariff for residential sector consumers,” Musallem told Arab News, adding that the details of the charges are still under study and are to be finalized after discussions with regulatory bodies and other stakeholders.
During his speech at the Saudi Water and Power Forum (SWPF) in October, where Al-Musallam first announced the likelihood of a tariff increase, he stated that the adjustment in charges are crucial for sustainability in the Kingdom and to ensure the national viability of the water sector and noted that water consumption is, “growing exponentially due to a lack of incentives for the customers to conserve water.”
He also noted at the forum that if no proper tariff is implemented water consumption could grow annually in the Kingdom by as much as 10 percent.
The recommendation to reduce water use through the introduction of water charges has also been backed by the National Commercial Bank in its October edition of a report entitled “NCB Weekly Views on Global Regional and Local Economic and Financial Developments.”
“In our opinion, imposing more regulations on agricultural activities coupled with a removing of subsidies on water are possible solutions to save strategic water resources,” the bank said in the report.
The bank’s proposal is for the need of a restructuring of prices that would completely remove the government water subsidy currently shouldering 90 percent of water costs.
