Residents across Abu Dhabi will see a hike in power and water tariffs by January 1 next year, the Regulation and Supervision Bureau in collaboration with Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC) said.
The hike in utility rates is part of a wider initiative aimed at driving behavioural change in how water and electricity are currently consumed in the emirate, the bureau said in a statement.
As per the new rules, Abu Dhabi will also start charging nationals for water use, a service that was previously free for citizens.
Emiratis living in an apartment will be required to pay a fee of Dhs1.7 per 1,000 litres if they consume 700 litres of water a day. If they exceed 700 litres of water consumption, the fee will increase to Dhs1.89 per 1,000 litres.
UAE citizens living in villas will be charged Dhs1.7 per 1,000 litres for using up to 7,000 litres a day. If their daily consumption exceeds 7,000 litres, they will be required to pay Dhs1.89 per 1,000 litres.
Meanwhile, expats in the capital will face a steeper water bill, with those living in apartments required to pay Dhs5.95 per 1,000 litres if they consume up to 700 litres a day. There will be cost reflective tariffs for those using more than 700 litres.
Expats residing in villas will also face a similar charge but their daily consumption limit will be capped at 5,000 litres.
For electricity, expats living in both apartments and villas will have to pay 21 fils for each kilowatt-hour (kWh) compared to the current charge of 15 fils, authorities said. This charge applies to those using 20 kWh of power daily.
Emiratis currently pay a fee of five fils for each kWh in a flat and this will remain the same if they cap their daily power use to 30kWh. Charges will increase slightly to 5.5 fils if they use more power, the bureau said.
The same five fils per kWh will also continue to apply to those in villas if they limit their power consumption to no more than 400 kWh, while those exceeding the amount will have to pay 5.5 fils per kWh.
“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,” said Saif Al Qubaisi, the bureau’s acting director general.
Earlier this month, an International Monetary Fund (IMF) official had said that Abu Dhabi was looking to reform its system of subsidies for power and water to curb lavish use among residents.
“We discussed it here at the policy level, particularly with the Abu Dhabi government, which indicated they are now looking at ways to streamline their subsidy policies and put in place something different, something better targeted,” said Harald Finger, the IMF’s head of mission for the UAE told Reuters.
Finger, who did not reveal any further details, added that the reformed policies concerning utility tariffs in the emirate are headed in the right direction.
Subsidies and transfers account for nearly 20 per cent of Abu Dhabi’s budget, or Dhs47.8 billion ($13.0 billion) this year, the IMF has estimated, using data from the Abu Dhabi Department of Finance.