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Abu Dhabi raises water tariff by 6%

Water consumers in Abu Dhabi exceeding a daily consumption cap will now have to pay more following the new water tariffs implemented by Abu Dhabi Distribution Company (ADDC) in January

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Water consumers to pay more for exceeding daily cap
Water consumers to pay more for exceeding daily cap

Water consumers in Abu Dhabi exceeding a daily consumption cap will now have to pay more following the new water tariffs implemented by Abu Dhabi Distribution Company (ADDC) in January.

The standard (or Green Band) tariff for expatriates has remained unchanged at Dh5.95 for each 1,000 litres, but those who exceed the daily limit of 700 litres in flats and 5,000 litres in villas will now be charged Dh10.55 per 1,000 litres, an increase from the Dh9.90 rate last year.

Electricity charges were revised in January 2015. The standard (or Green Band) tariff for expatriates is 21 fils per kilowatt hour. Those exceeding the limit of 200 kilowatt hours of electricity per day in villas or 20 kilowatt hours per day in flats are charged 31.8 fils per kilowatt hour.

Expatriates living in apartments will have a daily limit of 20 kilowatts, and will be charged the same rates for exceeding the limit.

The new rates were brought in as the Gulf economies battle low oil prices to raise revenues by cutting down on subsidies. In a landmark decision in July last year, the UAE Ministry of Energy deregulated fuel prices and a new policy linked to global oil prices was introduced, reported Gulf News.

It quoted Mathias Angonin, an analyst at Moody’s Investors Service Middle East who said that the recent measures to increase water tariffs beyond certain levels would also encourage consumer rationalisation and limit growth in consumption.

“Total subsidies in the UAE amounted to $12.6 billion (Dh46.2 billion) in 2015, which equates to 2.9 per cent of GDP or $1,320 per person. Reductions in subsidies will support the UAE’s budget position in an environment of prolonged lower prices by downsizing social spending,” said Angonin.

“Our expectation is that oil prices will remain at around $33 per barrel this year, about half the UAE’s fiscal break-even oil price. It is likely that the UAE will resort to more subsidy reforms to plug the fiscal gap, besides tax increases,” he added.

 

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