Global Water Prices Outstrip Inflation as Scarcity, Neglect and Public Finances Catch up with Customers

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Global Water Intelligence publishes results from the Water Tariff Survey 2014, exposing water’s dependence on economic indicators, as energy crises, currency runs and political unrest pushed more costs onto domestic consumers.

Average tariffs and water usage in selected major countries

Governments around the world are beginning to realise that subsidising water is a bad idea. Although we would all want water to be free the fact is that delivering plentiful safe drinking water and dealing with the waste costs an awful lot of money.

The global cost of water has risen by 4.3% in the past year according to Global Water Intelligence’s 2014 Water Tariff Survey. On average residents of the 355 cities surveyed pay $2.18 per cubic metre for water and wastewater services combined, with the most expensive water in the world found in Aarhus, Denmark, whose tariffs is calculated to be $10.09/m3 for the benchmark 15m3/month user. The cheapest water is to be had in countries like Turkmenistan and Ireland which do not charge for water yet (from next year Dubliners will pay $5.58/m3)

The steepest tariff rises in the 2014 survey have been in the Ukraine with Kiev and Odessa both seeing the price of water more than double. This reflects the withdrawal of public subsidies of water tariffs, a trend which is driving ahead-of-inflation price rises everywhere in the world.

The price of water and wastewater services is growing fast in the US, which saw average combined tariffs rise by 7% in the 2014 survey (against an inflation rate of 1.7%). This reflects the need for investment in America’s aging infrastructure as well as the impact of growing water scarcity. Recent droughts affecting California and the South West are likely to require inflation busting water price rises for some years to come.

The price of water is falling in Germany and Denmark, largely because very high levels of historical investment have paid off, reducing the requirement to spend more on water and wastewater services.

Christopher Gasson, publisher of Global Water Intelligence said: “Governments around the world are beginning to realise that subsidising water is a bad idea. Although we would all want water to be free the fact is that delivering plentiful safe drinking water and dealing with the waste costs an awful lot of money. And it is going to cost more money in future with the increased frequency of droughts and floods due to global warming, the steady decay of underground networks, and increased expectations of a clean water environment.
These issues are colliding head on with weakened public finances in the wake of the Global Financial Crisis, and in some cases leading to explosive rate increases."

The Water Tariff Survey 2014 was published in Global Water Intelligence Magazine on 16th September 2014 and is available to GWI subscribers only. For more information on Global Water Intelligence Magazine and to access the Water Tariff Survey 2014, visit the website or contact Edyta Bednorz: eb@globalwaterintel.com

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Edyta Bednorz
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