New electricity tariffs will create SAR 14 bln income: ECRA

The Kingdom’s recent move to hike electricity tariffs will generate additional income of SAR 14 billion, which was a huge deficit in electricity industry, said Abdullah Al Shehri, the governor of Electricity and Cogeneration Regulatory Authority (ECRA).

Electricity tariffs in the Kingdom are still lower than many top industrial countries, Al Shehri told CNBC, adding that there is a move to match electricity tariffs to global levels by 2023 at the most.

“Hopefully this will assist in the improvement of the electricity industry and implementation of its projects,” the governor added.

The new tranches in the tariff had existed before, but electricity was discounted and heavily subsidized, he said. Now, however, tariffs have been adjusted to reflect the cost of production at current fuel prices.

The new prices will come into effect starting from Jan. 1, 2018 until the end of the year, where they will be revised according to fuel prices then, Al Shehri said.

On Tuesday, the Saudi Cabinet approved the gradual correction of prices on some energy products. Accordingly, the ECRA unveiled new electricity tariffs to be effective from Jan. 1, 2018.

Under the new prices, consumption tariffs for residential, commercial, agricultural, healthcare, private education, and charitable institutions will increase.