Drivers and challenges to water tariff reform in Saudi Arabia

ABSTRACT

In 2015, increases in the domestic water tariff in Saudi Arabia were met with significant opposition. Although the increases were needed to address the technical and financial sustainability of the service in the context of extreme scarcity and high costs, insufficient effort was made to explain the changes and prepare the public. This paper examines the trade-offs surrounding the design of a domestic water tariff, based on economic theory and global experience, and sets out the competing factors Saudi Arabia should consider when designing a new tariff structure to provide long-term public acceptability while ensuring the service remains sustainable.

KEYWORDS:

• Domestic water tariff
• water economics
• public views
• Saudi Arabia

Acknowledgments

The key messages of this paper were presented at a Water Economics Workshop held in Riyadh on 12 December 2019 under the auspices of the Ministry of Environment, Water and Agriculture, and involving the World Bank, OECD and Global Water Intelligence.

Data availability statement

The data for Figure 1 can be accessed via http://reshare.ukdataservice.ac.uk/853740/. The data described in this article are openly available in the Open Science Framework at doi:10.17605/OSF.IO/TPA6U.

Disclosure statement

No potential conflict of interest was reported by the authors.