Saudi King Salman approves SR500 monthly subsidy ahead of electricity and water tariff changes: Who will benefit?

Saudi Arabia’s King Salman bin Abdulaziz Al Saud has ordered a package of financial support measures, including an additional monthly allowance of 500 Saudi riyals (around US$133) for eligible citizens, as the kingdom prepares to introduce changes to electricity and water consumption rates from January 1, 2027.

The measures proposed by Crown Prince and Prime Minister Mohammed bin Salman will benefit eligible civilian and military employees, retirees, some family members of deceased contributors or retirees covered by the Social Insurance Law, and households receiving social security benefits, according to the Saudi Press Agency (SPA).

The measures were reported by several news agencies, citing the royal decree and an official announcement by the Saudi Press Agency.

The support package is intended to help citizens cope with the financial impact of revised electricity and water rates. The directives also include changes to minimum wages for Saudi employees under the Nitaqat Saudization program, which regulates the employment of Saudi nationals in private sector companies.

Saudi Arabia will provide SR 500 monthly support to eligible citizens

According to the royal directives, eligible civilian and military employees covered by pay scales and employment programs will receive an additional SR 500 per month.

The increase will also be extended to eligible pensioners and family members of deceased contributors or pensioners covered by the Social Security Act, in accordance with applicable rules.

Families receiving benefits under the social security system will also receive an additional monthly payment of SR 500 in accordance with relevant regulations and procedures.

The measures are designed to provide financial relief to eligible households ahead of electricity and water rate adjustments due to come into force on 1 January 2027.

The announcement comes as Saudi authorities seek to mitigate the impact of changes in basic energy costs while continuing efforts to boost job opportunities and income opportunities for Saudi citizens.

Saudi Arabia Raises Nitaqat Wage Threshold to SR 5,000, Then to SR 6,000

The royal directives also provide for a gradual increase in the minimum monthly wage required for a Saudi employee to be fully counted against a private company’s Saudization quota under the Nitaqat program.

In the first phase, the threshold will be increased to SR 5,000 per month, effective six months after the start of implementation of the measure.

It will subsequently increase to SR 6,000 per month effective 12 months after the first increase is introduced.

The Nitaqat program is designed to encourage private sector employers to hire Saudi nationals by linking companies’ compliance with Saudi requirements to the proportion of their workforce made up of Saudi nationals.

The revised wage thresholds aim to improve wage levels for Saudi employees and promote more sustainable employment opportunities in the private sector.

The changes are part of a wider package announced by King Salman at the suggestion of Crown Prince Mohammed bin Salman.

Changes to electricity and water tariffs will come into effect in January 2027

The financial support measures are in line with the electricity and water tariff adjustments announced by the Saudi Electricity Company and the National Water Company effective January 1, 2027.

Additional monthly payments to eligible beneficiaries are intended to help offset the financial impact of these changes.

The royal directives cover both direct financial assistance to eligible households and measures aimed at improving wages and working conditions for Saudi nationals.

While the SR500 monthly allowance is intended to provide immediate support to eligible beneficiaries, Nitaqat’s gradual wage changes focus on the long-term goal of boosting Saudi Arabia’s participation in private sector employment.

Read also | Manu Joseph: Saudi execution is a reminder of how easily we can go back Salman