MUSCAT : In a major development, Oman will lift the subsidy on electricity and water in a phased manner over a period of five years.

Speaking to The Arabian Stories, a top official has informed that the move will help government spending and improve the financial stability.

As part of the subsidy reform, the new electricity and water tariff structures will be implemented across all customer categories beginning from 1 January 2021. However, social security families will be protected through the National Subsidy System (NSS).

“This will help in improving the financial stability and enhancing the efficiency of the government,” the official said.

The lion’s share of the government’s total subsidy allocation is enjoyed by the electricity sector, with assistance of OMR 500 million pledged to consumers in 2020. This represents a 3 per cent increase over the corresponding allocation of OMR 485 million for the sector in the 2019 Budget.

Meanwhile, on Sunday, Mohammed Bin Hamad Al Rumhy, Minister of Energy and Chairman of the Board of Directors of the Public Services Regulatory Authority has issued a decision to amend some provisions of regulations for the tariff for the supply of drinking water.

Article 1:
The texts of articles (2,3,5,6) of the aforementioned drinking water supply tariff regulation shall be replaced by the following texts:

Article 2:
The subscriber is classified according to the purpose of supplying potable water into the following categories:

1- The non-residential category includes accounts of real estate used for non-residential purposes such as those related to governmental, commercial, industrial, tourism, agricultural and fishery activities, whether they are for permanent or temporary use, or those properties are built on lands of residential or non-residential use

2- The residential category includes real estate accounts used for residential purposes and is divided into :

• Citizen accounts: accounts registered in the name of an Omani subscriber and not exceeding two accounts, and the subscriber must specify these two accounts if he has more than that in accordance with the controls and rules approved by the Commission.
• Additional accounts: accounts registered in the name of an Omani subscriber, the number of which exceeds the two accounts registered in the accounts of citizens or accounts registered in the name of a non-Omani subscriber according to the controls and rules.

Article 3:
The tariff for supplying drinking water for non-residential subscribers is
according to the following:

In 2021 the tariff will be 0.990 baisa per cubic meter, and in 2022 the tariff is 1,100 baisa per cubic meter, and in 2023 the tariff will be 1,210 baisa per cubic meter, and in 2024 the tariff will be 1,320 baisa per cubic meter.

The tariff for supplying potable water for a residential subscriber is according to the following:

• Citizens’ accounts: the tariff is set at 0.550 baisa per cubic meter, and it will gradually increase annually to reach an unsupported tariff commensurate with the economic cost of supplying potable water by the end of 2025.
• Additional accounts: The tariff is set at 0.660 baisa per cubic meter and increases annually by 0.110 baisa per cubic meter, leading to an unsupported tariff commensurate with the economic cost of supplying potable water by the end of 2024

The authority calculates the changes in the tariff for supplying potable water before the beginning of each year and publishes them no later than the first of December of the previous year, according to the legally established procedures.

Article 5:
The tariff for supplying potable water in bulk shall be according to the actual cost reflected from the provision of that water, and it is calculated annually in accordance with the rules and principles specified by the Authority.

Article 6:
The tariff for supplying potable water for the invested networks shall be in accordance with the rules and principles determined by the Authority, up to an unsupported tariff and in accordance with what is in force in determining the tariff for residential and non-residential groups.

Two new articles are added to the tariff list for the supply of drinking water, with numbers (8, 9), as follows:

Article 8:
The tariff for supplying potable water for those licensed to practice non-related water sector activities shall be in accordance with the terms and conditions of the licenses issued to them in this regard.

Article 9 :
The accounts of citizens who meet the conditions and controls for entitlement to water subsidies within the social life system approved by the competent authorities benefit from the deduction percentage determined for them or any other mechanism decided within the social life system and that is for monthly consumption to the limit stipulated in the relevant controls and decisions issued by the competent authorities. The monthly consumption that exceeds the limit stipulated in those controls and decisions is calculated according to the tariff specified in Article Three of these regulations.