Abu Dhabi: Water and electricity tariff for both Emiratis and expatriates had been revised with effect from January 1, 2015, in an apparent move to minimise government subsidies.

Utility tariffs in Abu Dhabi have been heavily subsidised by the government. The electricity subsidy in residential buildings ranges from 55 per cent to 90 per cent and the water subsidy ranges from 79 per cent to 100 per cent, according to an Urban Planning Council Document.

Under the new tariff, Emiratis have to pay for water that is free under current tariff. There is no increase in electricity tariff for Emiratis who use up to 30 KWh (kilowatt hours) a day in flats and 400 kwh a day in villas.

They can continue paying the existing rate of 5 fils per kwh. But Emiratis who use above this limit have to pay a new tariff of 5.5 fils per KWh.

The Regulation and Supervision Bureau (RSB), in collaboration with Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC), announced the new structure.

High usage

Every UAE resident uses 550 litres of water and 20-30 kilowatt hours (KWh) of electricity a day against the international average of 170 to 300 litres and 15kwh per day respectively, according to the Federal Water and Electricity Authority (Fewa).

Better conservation practices can save 14-17 per cent of water and energy.

Under the new water tariff, Emiratis have to pay Dh 1.7 per 1,000 (one thousand) litres up to the use of 700 litres a day in flats and 7,000 (seven thousand) litres a day in villas.

Beyond this limit, the tariff will be raised to Dh 1.89 per 1,000 litres.

Low-use category expatriates will face around 170 per cent increase in water tariff, from the existing Dh 2.2 per 1,000 litres to Dh 5.95 per 1,000 litres.

“Those who use beyond 700 litres per day in flats and 5,000 (five thousand) litres per day in villas will have to pay a higher tariff that will announced later this month, an official spokesperson of RSB told Gulf News on Wednesday.

Around 40 per cent increase in electricity tariff will be there for expatriates who have a low consumption -- from 15 fils per KWh to 21 fils per KWh.

Those who use beyond 20 KWh in flats and 200 KWh in villas will have to pay a higher tariff that will also be announced later this month.

Around 82 per cent increase will be applied in water tariff for commercial and industrial use, from Dh 2.2 per 1,000 litres to Dh 4 per 1,000 litres.

However, the increase in electricity tariff is not so high in industrial and commercial sectors.

The change aims to encourage the efficient use of water and electricity, and raise awareness of the importance of reducing consumption to support the sustainable growth of the emirate and to ensure supply of water and electricity and securing its resources and its diversification, an RSB statement said.

The RSB Acting Director General, Saif Al Qubaisi said: “The restructuring of tariffs will help drive understanding of the true value of water and electricity which, in turn, supports the sustainable growth of the Emirate of Abu Dhabi. ”

The changes to the tariff structure are part of a wider initiative aimed at driving behavioural change in how water and electricity are currently consumed in the Emirate.

Subsidies and transfers, accounting for nearly 20 percent of annual expenditure of Abu Dhabi Government or 47.8 billion dirhams this year, the International Monetary Fund has estimated, using data from the Abu Dhabi Department of Finance.

Abu Dhabi Government had indicated looking at ways to streamline its subsidy policies, Reuters reported last week quoting Harald Finger, the IMF’s head of mission for the UAE.

The plunge of global oil prices over the past few months, to four-year lows of just below $82 per barrel last week for Brent crude, and , has encouraged some governments in the Gulf to review their generous cradle-to-grave welfare systems. Kuwait and Oman are planning subsidy cuts, the Reuters report said.