Saudi Gazette

Jeddah — From Monday, consumers will have to bear a threefold increase in electricity tariff with the implementation of Value Added Tax (VAT) and a revised bill calculation system.

Saudi Electricity Co. (SEC) will apply 5% VAT on electricity bills, connection and service charges.

The Electricity and Cogeneration Regulatory Authority (ECRA) has also revised its decades-old bill calculation system.

Earlier, it was charging a nominal tariff of 5 halalas for first 2000 kilowatt per hour (kWh) of electricity consumption per month. A moderate tariff of 10 halalas was being charged for consumption from 2001 to 4000 kWh, and 20 halals from 4001 to 6000 kWh per month.

A significant number of subscribers, mostly families living in flats, fall under the first two categories.

Now ECRA has removed the consumption slab calculation system.

The new system will calculate up to 6000 kWh in single slab.

Residential electricity consumption of 1-6000 kWh per month will cost 18 halalas kWh. But consumption above 6000 kWh per month will cost 30 halalas kWh.

With the threefold increase in electricity tariff, a consumer currently paying SR200 per month for modest power consumption for three air conditioning units, a few fluorescent tubes, iron, television, washing machine, game console and a refrigerator will now have to cough up SR600 per month.

Saudi Arabia is the only country in the world where household accounts for more than 50% of total power consumption, where electricity is largely wasted.

More than 70% of power is being used for air conditioning system in the Kingdom.

“People do not periodically change air filters which get blocked with dust affecting cooling. Increasing the cooling of thermostat also consumes more power,” explained Mushtaq Ahmed Khan, application engineer with Abdul Lateef Jameel Group.