On a per capita basis, here in Saudi Arabia we are among the world's highest users of power and water. Given the climate and the rising demands of industry, these figures are not, of themselves, surprising. However, what has to raise eyebrows is the fact that we also pay among the world's lowest prices for both these commodities.

Worse perhaps, for a variety of reasons, a significant number of bills, especially for water, are reportedly never collected. One reason for this may be that the actual sums involved actually make collection uneconomic.

This can be seen from figures from the governor of the Electricity and Cogeneration Regulatory Authority (ECRA), Dr Abdullah Al-Shehri. He said the cost of desalinating and distributing a ton of water was in the region of SR15. Yet it was sold to consumers for just ten halalas. What that means is that the ECRA is recovering just 0.67 percent of the total cost of the water. Put another way, the state is paying for almost the entire cost of the water used in this country.

Something given free is valued far less than something paid for. Thus there is a substantial misuse of water. Grass and gardens are sprinkled in the middle of the day when evaporation is at its highest. It is nothing to see hose pipes left turned on or dripping steadily. This may be due to the carelessness of gardeners and other workers, but in the end, it is down to their employer to make sure that they are not profligate in their water use.

Unfortunately, given the almost insignificant cost of this commodity, there is absolutely no incentive for anyone to care about waste. Thus it would seem that, as the Kingdom expands, both industrially and demographically, water consumption will continue to outpace that growth, thanks to ever-more profligate use.

Yet water is a precious resource that was once treasured in the Kingdom. The ownership of wells or the access to oases was an important part of the social fabric. Without water, people perished. That was why the poisoning of wells was such a dreadful tactic during conflicts in the peninsula.

Yet today water is used and indeed abused, without a second thought. Its availability is taken for granted. Because of this blinkered attitude, there is an unforgivable degree of wastage.

Europeans working here are often astonished at this attitude. Even though their own countries have superabundant rainfall when compared to the precipitations here in the Kingdom, there are active campaigns to save water. At its very simplest level, in the UK for instance, people regularly turn off the cold water tap when they are bruising their teeth, only turning the flow back on to wash out the sink.

The position with electricity is hardly much better. Though the collection of bills is more effective, because the metering allows for the automatic calculation of what is due, the basic reality is that the cost of electric power is still way too low. Look at most office buildings over the weekend. The chances are that the lights will be one and also that the air-conditioning units will be working away, cooling floors and floors of brightly lit but entirely empty office space, with desks almost all of which have computers and screens that are also still turned on.

There will be those that argue that the Kingdom can well afford the huge subsidies for water and power. Yet it is important to recognize that the pricing system we have at the moment not only has an obvious environmental cost but it also has an economic impact as well. By distorting the cost of electricity, Saudi Arabia is undermining its international competitiveness. Cheap power and water may seem like a commercial advantage now, especially when it comes to energy and water-intensive industries. But the truth is that the low costs distort the business model, because they do not encourage efficiencies throughout an operation. Indeed cheap inputs subsidize poor management elsewhere. In the greater scheme of things, Saudi businesses, operating in the free markets of the World Trade Organization, of which we are a member, are actually at a distinct disadvantage, because we have not had to bite the bullet of water conservation and economical use of power.

Abdullah Al-Shehri is, therefore, entirely right in his call for a radical overhaul of the pricing for water and power. Now he needs the backing of far-sighted businessmen who appreciate the dangerous distortions that threaten the economic viability of the Kingdom's emerging non-oil economy.