Saudi Arabia to Adjust Electricity and Water Tariffs from 2027, Supporting Households with 500 Riyals

Saudi Arabia announced that it will adjust electricity, water, and sanitation tariffs as of January 1, 2027, to include residential, non-residential, and government customers, aiming to improve consumption efficiency and service sustainability. The Ministry of Energy and the National Water Company announced the adjustments in accordance with energy and water price adjustment procedures.

King Salman bin Abdulaziz ordered support measures following a proposal by Crown Prince and Prime Minister Prince Mohammed bin Salman, which include monthly support of 500 riyals—approximately 133 dollars—for eligible categories. The measures are distributed across three tracks: an additional monthly allowance of 500 riyals for social security beneficiaries, a monthly increase of 500 riyals for civil service employees and operational roles, and a gradual increase in the approved minimum wage threshold in the Nitaqat program.

The water bill increase for customers consuming 30 cubic meters or less will not exceed approximately 67 riyals, including Value Added Tax (VAT), as 99% of residential customers have connections with a diameter of up to 40 millimeters. Water tariff adjustments do not apply to industrial or agricultural uses, while the impact of electricity adjustments is expected to be limited on most industrial, commercial, and agricultural activities, with an agricultural electricity bill of 5,000 riyals per month potentially rising by about 300 to 400 riyals.

The minimum wage threshold in Nitaqat will rise to 5,000 riyals on April 25, 2027, and then to 6,000 riyals on April 25, 2028, in two phases providing establishments time to prepare, with support disbursed through existing records in coordination with relevant authorities. The relevant entities expect limited upward pressure on inflation and view the accompanying support measures as helpful in containing it and stabilizing living costs.

What Do These Terms Mean?

Nitaqat: A Saudi program linking the employment rates of Saudis in establishments to a minimum wage, classifying companies according to their compliance with Saudization rates.

Electricity Tariff: The unit price billed to the subscriber for electricity consumption, varying based on the consumption bracket and customer type.

Value Added Tax (VAT): An indirect tax added to the price of a good or service and collected at the time of sale, amounting to 15% in Saudi Arabia.