UAE Energy Minister Suhail Al Mazrouei
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The UAE’s economic diversification strategy will be extended by removing further subsidies on energy, the federation’s Energy Minister Suhail Al Mazrouei told the World Economic Forum in Davos yesterday.
Al Mazrouei said he was planning to scrap subsidies on electricity and on gas sold to power generators, The Abu Dhabi daily The National reported.
“We need to think about major reforms to make the budget less dependent on the oil price, and to build an economy that is vibrant but also taking advantage of the lower oil prices,” The National reported him as saying.
“We saw the opportunity to do the right thing and to get people to pay the right price for energy. We have done it with petrol and diesel, next is electricity. We must remove remaining subsidies from electricity generation. Most of it is not subsidised, the majority of the tariff is fair. But there are old gas contracts that are not realistic and do not reflect fair pricing,” he added.
Mr Al Mazrouei said that national populations could be “persuaded” to accept and embrace economic reform even when it might affect their standard of living by increasing consumer prices. “The economy is still growing but the challenging thing is to get more efficiency. We are redirecting the subsidy as an opportunity to invest in other parts of the economy, like building schools and hospitals. It’s a convincing story. It’s not so difficult to understand,” he said.