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UAE energy minister: turn off the lights

UAE energy minister Suhail Al Mazrouei: urgent need to reduce consumption

UAE energy chiefs hope to slash Dh3.5 billion from the power and water subsidy bill by encouraging people to switch off their lights and turn off their taps.

“Today, as never before, we see the urgent need to reduce consumption,” said the UAE Minister of Energy, Suhail Al Mazrouei. “The squandering of resources is the enemy of development. We are working on supporting a culture of reasonable consumption in various government and private establishments, as well as in homes, schools and mosques.”

The low oil price makes subsidies on already cheap commodities harder for the government to afford. The UAE hopes consumers will cut their consumption by 10% – currently, it is increasing at a rate of 6% a year, reports The National.

The ministry says it spends Dh35 billion on subsidies for fuel and water. The International Monetary Fund estimates that the actual bill to the government is higher, at about Dh46.4 billion – but argues that the real cost in terms of pollution, forgone tax, overconsumption, traffic accidents and congestion is closer to Dh100 billion.

The price of oil has dropped by more than half since June last year. This has hit government revenues, the bulk of which are earned from oil exports. This shortfall means that the UAE will run its first budget deficit since 2009, according to the IMF.

The government has cut Dh6.8 billion from its spending on fuel subsidies this year. Abu Dhabi cut subsidies on electricity and water for expatriates at the beginning of the year, and the Ministry of Energy changed the way it sets fuel prices in August, which has led to increased prices at the pump.

Picture: Dean Calma/IAEA