Saudi King Fires Water Minister After Complaints Over Tariffs

  • Saudis turned to social media to protest price surge
  • Deputy crown prince said ministry's actions `unsatisfactory'

Saudi Arabia’s King Salman fired the water and electricity minister following public complaints over a surge in prices less than six months after the government cut generous utility subsidies.

Agriculture Minister Abdel Rahman al-Fadhli will take over the water and electricity post from Abdullah al-Hasin, the official Saudi Press Agency reported late on Saturday, citing a royal decree.

Saudis turned to social media to express their anger after the increase in prices of water and the Consumer Protection Association asked the government to reevaluate the decision. Deputy Crown Prince Mohammed bin Salman told Bloomberg in an interview this month that the ministry’s implementation of the new water tariff was “unsatisfactory.”

The government announced cuts in utility and gasoline subsidies in December as it tried to rein in spending after a steep drop in oil prices. Including future reductions, authorities expect the restructuring to generate $30 billion a year by 2020, part of a broader plan to raise non-oil revenue by $100 billion to reduce the country’s reliance on crude exports.

“Now, we are working diligently on reforms within the water ministry so that things will be in accordance with the agreed plan,” Prince Mohammed said, without providing details. Water prices climbed as much as 500 percent for Saudi nationals, according to John Sfakianakis, Riyadh-based director of economic research at the Gulf Research Center, a think tank.

Raising prices poses a challenge to Gulf Arab monarchies. A survey of young Arabs found that more than 90 percent of those questioned in the Gulf states of Qatar, Oman and Bahrain want subsidies to continue, while 86 percent agreed in Saudi Arabia, the world’s largest oil exporter.

Prince Mohammed said the kingdom will limit the impact of cuts on its citizens by developing a mechanism to provide cash to low- and middle-income Saudis.

The prince, the king’s son and second-in-line to the throne, is leading the biggest shake-up of the economy since Saudi Arabia’s founding after oil prices fell from the end of 2014. The kingdom will announce its vision for the future in the post-oil era on April 25.

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