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Wed 17 Aug 2011 11:07 AM

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Expats underwhelmed by DEWA price freeze

Residents argue housing fee and fuel surcharge outweigh benefit of frozen tariff

Expats underwhelmed by DEWA price freeze
The UAE is one of the highest per capita consumers of water and electricity in the world
Expats underwhelmed by DEWA price freeze
The UAE is one of the highest per capita consumers of water and electricity in the world

A move by Dubai’s top energy council to freeze water and
electricity tariffs in the emirate has been met with muted enthusiasm by expat
residents, who say the standstill will have little impact on their bills.

Utility costs in the UAE are among the cheapest in the
world, but expats argue that additional charges such as housing fees and fuel
surcharges can comprise more than half of monthly bills.

An American expatriate living in Mirdiff, who asked not to
be named, said the price freeze would have minimal impact on the cost of his
utilities bill.

“Right now the housing fee and fuel surcharge make up more
than 50 percent of our total DEWA bill,” he said. “Our consumption of
electricity and water is low because we are conscious of turning off lights,
the air conditioning and so on, when we go out or when we leave a bedroom.”

Another resident said that efforts to cut back on
electricity and water usage had made little difference to his family’s monthly utility
costs, once additional charges were taken into account.

“The
housing fee and fuel surcharges typically account for more than 75 percent of
my DEWA bill. Bathroom fitting changes, which reduced my monthly water
consumption by around 40 percent, had a negligible impact on the billed amount.”

Another
Arabian Business reader said the move may help rein in rising electricity and
water costs during the hot summer months.

“We pay
about AED3000 during the summer for electricity for our six-year-old,
well-maintained villa. All our efforts to reduce electricity consumption have
actually not resulted in any visible energy saving.”

Dubai's Supreme Council of Energy said Sunday that it would put
a standstill on electricity and water tariffs in the emirate “during the few
coming years”.

The UAE is one of the highest per capita consumers of water
and electricity in the world. Rising demand for power in Dubai, where soaring
summer temperatures drive up air conditioning use, has forced the emirate to
buy more natural gas to feed its power stations.

Expat residents living in Dubai are already charged housing
fees – billed by Dubai Municipality but collected through the monthly utility
bills - that are calculated at five percent of the rental value of their home.

Dubai Electricity and Water Authority (DEWA) also introduced
a variable fuel surcharge in January that charges residents based on the amount
of energy they consume and the cost to the utility of the fuel at the time of
its purchase.

Housing fees, which are not applicable to Emiratis, have
been categorized as an “expat tax” by some residents, who argue they are being
unfairly targeted.

“If it
is only expats who are required to pay these charges then how can expats
consider these charges anything but an expat tax? As far as we know Salik
is charged to everyone but not the housing fee - this is a specific charge
targeting foreigners,” said the Mirdiff resident.  

Analysts
warned artificially low utility tariffs would make it difficult to persuade
residents to cut back on their electricity and water consumption, in a region
where increased demand for cooling is a major driver behind rising power use.

“The financial reward for those who conserve water is lower
than it otherwise would be if prices were cost-reflective,” said Robert Bryniak,
CEO of consultancy firm Golden Sands. “Any
economist will argue that low prices encourage higher usage everywhere… it is
easy to envision consumers in UAE taking the view that water can’t in fact be a
scarce or valuable resource because prices are low.”

Consumer prices in Dubai, the second-biggest member of the UAE, increased
an annual 0.62 percent compared with 0.75 percent in June, according to data
published Tuesday.

Housing, water and electricity costs fell 3.5 percent, the
most since May 2010.

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sonnydubai 8 years ago

I have just returned from a 3 week holiday with my family and my August DEWA bill has just been sent. It is the same as July when we were all there. Before leaving we turned off all plug sockets, all air cons, water heaters etc, only leaving switched on the fridge and freezer. We haven't lived there for 3 weeks! So why hasn't my bill come down? Having spoken to friends and colleagues they are in the same position. My bill for a 3 bedroom large apartment is now over 2000 dhs per month, when 2 years back it didn't ever go above 1000 dhs. It is bills like this that makes Dubai less appealing to try and raise a family here - it is now so so expensive to live here day by day.

Mark 8 years ago

Housing fees is not charged to every one , I have friends who live in the same building and they are not charged for this. It is not fair, and this fee is not justified .

Rajan 8 years ago

the housing fees charged is only for apartments / villas when we produce our contracts. what about villas / apartments in freehold areas where the owner lives in? are they also to pay housing fees and is it being charged by DEWA?

Searching for reasons... 8 years ago

Sonny, freeze is the exact word you hear and you talk as well.. Only difference is either through years or months... Even, i have a record that supports exactly what i faced when i was on my vacation that too between August and September two years back. So, it is around for quite sometime. I filled up complaint form, and after few weeks of followup, heard that there is no problem in the meter, everything working fine. That is it.

John 8 years ago

DEWA costs and housing fees are a very small amount to pay compared to what Dubai has given us. We are indebted to Dubai for a safe environment, almost zero crime rate, family friendly policies, world class shipping and dining, wide roads, the best cars to buy and drive etc .
In return all we do is pay some fees, we definitely benefit much moe than what we pay

Omar 8 years ago

The Dewa bills are becming really disgusting and frustrating! Shame!! For different reasons, i decided to take a drastic action to decrease my Dewa bill. I live in a small 2 bedroom villa in Springs. I told my maid to limit Water and Electricity consumption to the minimum of the minimum. Only 1 Ac in Summer, water to the minimum, still the Dewa bill didn't go down but increased instead. I am getting rid of our Electrical cooker, keeping just 1 light on, and limiting the watering of our mini garden to the minimum. Let's hope the bill will go down. I am really frustrated. I believe that no matter what, the Dewa bill is set in advance! That's completely unfair! I want to cut my Dewa bill to save money and also, contribute to the environment of the country i live in. It's really sad to read facts that Dubai has one of the highest consumption levels per capita in the world.

Mark 8 years ago

Housing fees have been charged in Dubai for as long as I have lived here, 16 years, the problem was that DM never enforced the system and therefore lost out and people were therefore not aware of the fee. Since DEWA started bto administer the charge people have woken up to it. Since DM are responsible for keeping the streets clean etc the fee is justifiable, no different to anywhere else in the world where rates/poll tax etc is levied. If a neighbour is not paying then it means that they have been lucky enough to slip through this year but as all new/renewed tenancy contracts are now registered with RERA the loophole will be closed.

Robert 8 years ago

When the article indicates that UAE utility costs are 'among the cheapest in the world' it does so without citing the source of this statement. I would be interested to see the the authors evidence for this assertion.

Harmony 8 years ago

Utility costs are extortionate in Dubai. There is no way they are one of the cheapest in the world. Everyone in Dubai who you talk to is complaining about the massive charges. Our charges have increased from a couple of hundred in the heat of the summer to nearly 3000 dhs. There are still just the 2 of us, operating the same electrical appliances, using the same amount of water. Even when we were out of Dubai for the month of April, our utilities were the same. We have had our water and electricity meters checked and supposedly there is nothing wrong with them. Seriously - how does our elec and water usage not go down when we are away for an entire month!!! The only things still running were the fridges, and a timer controlled energy saving lightbulb for a couple of hours each evening. No cooking, no washing, no lighting, etc. Utility is heaps cheaper in the UK, and that's expensive.

Mazen 8 years ago

You can always move to Saudi Arabia or go home if you don't want to pay the fees.