Bahrain to do away with subsidies on utilities March onwards

Friday, 08 January 2016 08:59

Bahrain is the third lowest in household rates for electricity and water among the six GCC countries. (Image source: Rory/Flickr)Bahrain has approved the removal of subsidies for electricity and water in March this year, which will eventually see prices double for expats and large companies in the industrial sector

The removal of subsidies will also apply to those Bahrainis with more than one household, but will not affect Bahraini households or small and medium businesses.

The changes, which are part of Bahrain’s overhaul of the subsidy system in the country, will see prices gradually increase over a four-year period.

Gulf Daily News reported that changes will save the government a total of US$1.1bn when fully implemented – US$769mn on electricity and US$386mn on water.

Kuwait’s energy minister Abdulhussain Mirza, said, “The government has allocated US$927.5mn for last year and this year to subsidise electricity and water, which we believe is improperly directed to wealthy Bahrainis, expatriates, visitors, big commercial and industrial establishments and ministries and government bodies.

“We have excessive usage with limited resources so increasing the rates will save our conservation programmes, and bring the prices in line with other rates in the GCC.

He added that Bahrain is the third lowest in household rates for electricity and water among the six GCC countries, second lowest in electricity rates for the industrial sector, second lowest electricity rates for the commercial sector, and the fourth lowest in water rates for non-household.

“Even with the increase in rates our standings remain the same, which means that with the increase we are maintaining our position as providers of cheaper services.”