Oman to increase electricity prices for big corporate users

Oman, seeking to bolster state finances as low oil prices slash its revenues, will raise electricity prices for large government, commercial and industrial users at the start of next year, an official said on Wednesday.

All government, commercial and industrial consumers of at least 150 megawatts per year will pay the higher tariffs, Qais Al-Zakwani, executive director of the Authority for Electricity Regulation, told reporters, adding that the measure was initially expected to affect 10,000 consumers.

“These consumers represent 1 per cent of the current total of electricity consumers in Oman, but they consume 30 per cent of the supply of electricity,” he said.

That group of consumers accounts for around 20 percent of government subsidies for power generation every year so the new tariffs are expected to save OMR100m ($260m) annually, he added.

The new prices will depend on the nature of consumers and whether they are using electricity in off-peak hours. They will be revised every year and announced in November of each year.

Zakwani said authorities did not intend to change tariffs for residential customers.

Since last year Oman has been cutting state subsidies and introducing other austerity policies to curb a budget deficit that totalled OMR4.02bn in the first seven months of 2016, up from a deficit of OMR2.39bn a year earlier.