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Sun 17 Feb 2008 05:40 PM

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Dubai utility to increase tariffs

Dewa is to introduce a sliding scale tariff system to raise prices for those who consume the most.

Dubai's state-owned utility said on Sunday it would introduce a new tariff system from March which would raise prices for those who consume the most.

The government has not changed the rates the Dubai Electricity and Water Authority (Dewa) charges its customers since 1998 although production costs have surged, driven by a rise in fuel prices, news agency Reuters reported.

The new "sliding scale" tariff system would encourage customers who fall into the higher categories of consumption to cut back on use, Dewa said in a statement.

"It does not affect those who consume reasonable electricity and water and who prove to be responsible," Dewa said, adding that 80% of consumers were unlikely to be affected.

The new tariff does not apply to UAE nationals, it said.

According to Dewa, the city's average individual consumption of 20,000 kilowatt hours a year and 130 gallons of water a day is higher than the United States, United Kingdom and Singapore.

A utility bill increase would add to soaring inflation in Dubai, which already has the highest cost of living in the United Arab Emirates. Inflation in the UAE hit a 19-year high of 9.3% in 2006.

"While there are no expected tariff increases in the short-term, Dewa is seeking government approval for an increase in electricity and water tariffs in the future across all customers as a whole," according to a prospectus obtained by Reuters handed to investors at a sale of bonds in November. (Reuters)

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily. 12 years ago

I don't feel this will actually hit the people who often are the highest consumers of water etc. From general observation many of the larger national households exhibit very large very green gardens, that obviously take a lot of watering to keep that way. Additionally, the habit of washing the footpah and damping the sand outside villas is incredibly wasteful. I know locals are not the only wasteful DEWA users, but i feel by making their payments of utilities so nominal, the company encourages abuse of this resource. The list of wasteful water usage is endless in the UAE, but i fail to see on this issue where the justification lies in not charging all by the same measure.

Mike 12 years ago

I salute the effort by DEWA to try and reduce consumption of wasteful customers but I fear the very people they should be targeting are the ones who have been exempted from this new scheme. At night you can always tell where a UAE National family live by the fact that their garden lights are all on. They are also the ones with housemaids washing down the path and sand with water every morning. Until they have to pay the same as everyone else for their utilities the UAE Nationals will have no incentive to cut back on their consumption. The time has come to end the subsidies in the interests of Dubai as a whole.

Wilhelm Niederhauser 12 years ago

If the government wants to encourage saving, then Nationals must be included in the scheme. They have mostly the largest villas, with many compound lights on the whole night. A responsible attitude towards usage of electricity and water needs to be the concern of the whole population, and not only foreigners.

Saeed Iqbal 12 years ago

I support all of the above comments.

Amjad Riaz 12 years ago

It's money making move in the name of conservation! if not then it the increase should be for everybody not just for expatriatesI guess if we are talking about water conseravtion then no one should be exempt from it. How can one nationality is still allowed to waste water where is others pay a higher price. Rules should be equal for everybody only.

tanweermahmoodallah 12 years ago

If the Dewa is increasing its tariffs and the world is crying out to save the enviroment,how is it that huge villas have their water spriklers running 24 hours a day and every bulb is lighted on the walls of the villas and inside the least for 10 hours a day if not more. Where is the sense of responsibility towards the enviroment?

Mohamed Mossa 12 years ago

I am sorry to see such a quick response to DEWA's newly implemented system. Guys, I see an attack on the utility only because Nationals are not included in the system, as if the system is justified, its only failure is the exemption of Nationals. Does that mean we agree on the principal- I guess the answer is YES, the issue is alarming, and consumption of electricity and water in Dubai is one of the highest in the world. If we leave out nationals, for now, where do you think this escalating rate of consumption will lead to? It is not a matter of need for more supplies, it is merely a matter of proper use of resources! Do we get the message? As for nationals, one is tempted to agree on what have been mentioned, but lets face a few facts: are not everyone has a certain privilege in his own home country, such as exemption from some taxes, or tariffs etc...? And, What is the percentage of the population we are talking about here, in terms of number of households? Isn't it small compared to the huge expatriate population. And above all, this exemption may not last forever! Don't get emotional. Some are calling for maintaining the luxury they are enjoying, but they want it to continue enjoying at a rather cheap cost.

Nick 12 years ago

Rent hikes, Salik, Inflation, Dewa…and there is more to come. All boils down to just one phrase…'take it or leave it’. No one is holding us back, we are all free men. Either we go by law of the land or go back home. Every place has its pros and cons and this place seems following the same trend what Darwin postulated ‘survival of the fittest’. I guess there is no point in cribbing except if we want to just vent out our frustation

Ayesha 12 years ago

This is with response to Mohd Moosa's comments. No country in the world has free electricity and water for their 'nationals'. This phenomenon is only in the GCC. Nationals in other countries pay upto 50% of their earnings as taxes to the Government so I am not sure which country we are comparing UAE too. The small population we are taking here do not live in 1200 sq meters apartments, almost all of them live in villas with huge gardens. If we are taking about 'CONSERVATION' here this applies to everyone, me you and the nationals. Anyone utilising these facilities should pay accordingly. WHY give special benefits to others. And one more point, expatriates dont get 60% increases in their salaries, nationals do and this factors are adding to the already burgeoning inflation rates in the UAE.

Vishwas B 12 years ago

With such prejudised increase in tariffs (only for expats) and the escalating inflation, Dubai is advancing to relinquish its reputation as the "most sought after place for real-estate" in the persian gulf & the globe - investors will certainly think about other places. It would be worthy to note that majority of the purchasers or investors are expats, especially from burgeoning asian economies.