Qatar tops in industrial usage of electricity in GCC

9/29/2015 11:27:02 PM

(MENAFN- The Peninsula)DOHA: Qatar is the top user of electricity for the industrial usage in the GCC. Of its total electricity supply 31 percent is being used for industrial purpose. Saudi Arabia stands the second with 18 percent of its total electricity supply going to industrial purpose.

Qatar’s residential usage of electricity is lowest in the region accounting for 23 percent of its total supply. Kuwait tops in residential usage with 58 percent followed by Oman (52 percent) Saudi Arabia (51 percent) Bahrain (49 percent) and UAE (39 percent).

NBK’s latest economic update on GCC countries noted low energy prices placed all six GCC countries among the top ten energy consuming countries on a per capita basis in the world with Qatar topping the list at around 18500 kg of oil equivalent per capita (koe/capita). Subsidies for gasoline and electricity constitute the biggest chunk of the energy subsidies.

The research note said the GCC countries’ energy subsidies are facing headwinds from lower oil prices. The GCC nations have already started trimming government expenditures in part by introducing cuts in energy subsidies to alleviate the fiscal burden. According to IMF estimates energy subsidies in 2015 in the GCC range from 1.1 percent of GDP in Oman to 4.6 percent in Saudi Arabia. While the recent drop in oil prices has reduced the cost of energy subsides the negative impact on oil revenues has been larger.

For example Bahrain’s subsidy bill shot up from 17 percent to 34 percent of oil revenues and Saudi Arabia’s from 11 percent to 20 percent between 2013 and 2015.

Gasoline prices in the GCC are heavily subsidised and among the lowest worldwide. Prices in Saudi Arabia are the lowest in the GCC at $0.16 per liter followed by Kuwait Bahrain and Qatar at $0.23 $0.27 and $0.27 per liter respectively.

Petrol prices in Oman and the UAE are the highest in the GCC at $0.31 and $0.47 per liter though they too remain well below gasoline prices charged in the US China and Turkey. The latter has the most expensive gasoline at $2.54 per liter.

Electricity subsidies constitute almost half of the energy subsidy bill with heavy reliance on natural gas as a main resource for production.

As per the General Subsidies Initiative GCC electricity production has grown at an average of 7 percent annually between 1999 and 2008. As a demand for electricity continues to grow most of the GCC countries cannot sustain the high reliance on cheap natural as for long and hence are facing higher production costs as the electricity prices to consumer remain low.

The residential sector is the biggest consumer of electricity in the GCC along with the commercial and public services sector rendering subsidy cuts more difficult. With the exception of Qatar and UAE more than 50 percent of the electricity supply is consumed by the residential sector.

Kuwait residential sector consumes 58 percent of the total electricity supply versus only 17 percent for the industrial sector.

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.