Saudi Arabia To Raise Electricity, Water Prices From January

30 Oct 2026 Issue: 69 / 44 By: Jamie Ingram

Saudi Arabia has unveiled its largest electricity price hikes since 2018. The reforms mark a further step towards reducing subsidies, a longstanding IMF recommendation, while helping curb demand growth and strengthen the kingdom’s energy security.

Saudi Arabia is increasing tariffs for electricity and water from 1 January 2027 in sweeping measures announced this week. The increases are the latest government measures to overhaul the power and water sector under a process that has been underway over the past decade (MEES, 10 July).

Electricity consumption growth has accelerated since the Covid-19 pandemic, with strong gains in all sectors (see chart 1). Population growth, strong economic growth and industrial gains have been major drivers, and the latest price rises should help moderate demand and encourage more efficient electricity use. Saudi Energy says the tariff adjustment won’t have a material impact on its financial results, as higher rates mean reduced government payments through the “balancing account,” which is the mechanism through which the company is compensated for below-market-rate pricing. (CONTINUED - 816 WORDS)