Dubai cost of living set to soar after hike in utility prices

Published:  18 Nov at 6 PM
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Expats in Dubai are facing a hike in their electricity and water charges from January 2014.

The emirate’s Federal Electricity and Water Authority has announced an increase of between 14 and 17 per cent on water and power charges to come into effect in January 2014. The increase will be on the slab rate, with the total divided between the two utilities.

According to a spokesman for the authority, the price rises were motivated by the fact that UAE users consume twice as much energy and water as does the individual international average. The increases in charges are expected to lower consumption by at least 20 per cent by 2017.

The expat community is being targeted exclusively, as the increases will not be passed on to Emirati households. FEWA CEO General Mohammed Saleh stated that the plan was intended to instill a conservation culture based on best practices, but did not explain why only expats were to be targeted.

The news came as swinging rent increases began to bite into the average dwindling expat salary. The surging economy is fuelling landlords’ expectations, and increases of 40 per cent and more are not uncommon.

Purchasing a property has also become harder as the banks have introduced tighter lending criteria and higher deposits as well as added transaction fees. Foreign companies with branches in Dubai are worried that the moves will reduce competitiveness in the region, and legal disputes over rental contracts are becoming common.
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