Saudi Arabia will establish a national program to optimize water and energy consumption, it announced in a cabinet statement on Monday, further moves in areas where the government is seeking to cut back huge subsidies.
The new program will review policy incentives currently in place for the energy and water sectors, taking into account both economic productivity needs and inequality within society, the statement said.
The announcement comes amid a major movement made on modernizing the kingdom’s energy and water sectors, intended to support sweeping economic reform plans for diversification and unlocking the economic potential of the world’s largest crude exporter beyond oil.
As part of the reform drive, Saudi Arabia aims to reduce electricity and water subsidies by 200 billion riyals ($53 billion) and reduce non-oil subsidies by 20 percent by 2020.
In May, The Custodian of the Two Holy Mosques King Salman bin Abdulaziz restructured the ministries responsible for handling water and energy policies.
Through royal decrees, King Salman bin Abdulaziz dissolved the old Water and Electricity Ministry and handed responsibility for electricity over to a new Energy, Industry and Natural Resources Ministry headed by Khaled al-Falih, chairman of state oil company Aramco.
The water portfolio was incorporated into a new Environment, Water and Agriculture Ministry.