Saudi Arabia adds 500-riyal allowance as power, water tariffs rise in 2027

Summary

• King Salman ordered a 500-riyal monthly allowance for employees, pensioners and social security families.
• Saudi Energy and National Water will apply revised electricity and water tariffs from January 1, 2027.
• Private-sector hiring costs rise as Nitaqat's qualifying wage moves to 5,000 then 6,000 riyals.

The latest

A monthly allowance of 500 riyals will go to civilian and military employees, pensioners and families covered by social insurance, under measures ordered by King Salman on the recommendation of Crown Prince Mohammed bin Salman. The Saudi Press Agency said Sunday the package is intended to ease the impact of revised electricity and water tariffs taking effect January 1, 2027.

Details

• The allowance: SPA said the 500-riyal monthly increase covers civilian and military staff on civil service pay scales and operating-programme budget lines, pensioners, and family members of a deceased subscriber or pensioner under the social insurance system. A separate 500-riyal monthly support goes to households benefiting from social security, under existing rules.
• The stated purpose: The agency framed the measures as contributing to easing the effect of the electricity and water tariff adjustment, tying the household support directly to the January 2027 price change rather than presenting it as a standalone pay rise.
• Nitaqat threshold: The package raises the minimum wage required for a Saudi worker to count fully toward localization quotas under the Nitaqat programme to 5,000 riyals, applied six months after the measure starts, then to 6,000 riyals twelve months after the first increase takes effect.
• Timing gap: SPA did not specify how long the monthly allowance and support will run, nor the start date for the Nitaqat measure, leaving the sequencing of the two wage thresholds anchored to an unannounced trigger date.
• Saudi Energy: The company said in a Tadawul filing dated October 25, 2026 that it is amending the electricity service tariff under the governance procedures for adjusting energy and water product prices, effective January 1, 2027, according to Argaam. It added it would disclose any material impact on its financial results later.
• National Water: The company announced it will apply the revised water and wastewater services tariff to residential, non-residential and government sectors from the same date, extending the increase across all customer categories rather than targeting high consumption alone.
• Marafiq rates: Marafiq, the power and water utility for Jubail and Yanbu, filed its own adjustment on October 26, 2026, also effective January 1, 2027. Argaam cited the schedule: residential consumption at 21 halalas per kilowatt-hour for 1 to 6,000 kWh monthly, and 33 halalas above that.
• Other brackets: The same Marafiq schedule sets commercial consumption at 25 halalas per kilowatt-hour rising to 35 above the threshold, industrial at 23 halalas, and government at 35 halalas. Neither SPA nor Saudi Energy published the new tariff figures in their announcements.

Background

Nitaqat is the Saudi labour ministry's localization programme, which grades private-sector firms by the share of Saudi nationals they employ. Raising the wage floor for a worker to count fully tightens that calculation for employers relying on lower-paid Saudi hires.

Between the lines

The two measures pull in opposite directions for private-sector employers. The tariff adjustment raises operating costs from January 2027, while the staggered Nitaqat thresholds at 5,000 and then 6,000 riyals raise the wage needed for a Saudi hire to count fully toward quotas. Households receive direct cash offset; companies receive none in the announced package.

What's next

Watch for Saudi Energy's disclosure of any material financial impact, publication of its new tariff schedule, and the official start date of the Nitaqat measure that sets the clock for both wage thresholds.

Source: Saudi Press Agency (SPA), Argaam