Dubai is to freeze the price of power and water for "years", offering relief to consumers struggling with the rising cost of other goods.
The Supreme Council of Energy, the body responsible for setting the emirate's energy policy, has promised not to increase tariffs, according to a statement yesterday from the Dubai Electricity and Water Authority (Dewa).
The decision represents a U-turn from its warning last month that increases in the cost of natural gas - which is burned to produce power and desalinate water - would be passed on to consumers.
Nejib Zaafrani, the chief executive of the council, said in July: "When things are very cheap, do we worry about them? Is the energy in Dubai very cheap? Yes. We are cheaper than the US, we are cheaper than Europe ... the cost of energy counts."
The emirate has set itself ambitious targets to cut energy consumption by 30 per cent over the next 20 years.
However, Bob Bryniak, the chief executive of the utility consultancy Golden Sands, warned the latest move would not help conservation efforts: "That's not going to play well in that regard, if they're trying to get more consumers to pay attention to their energy use."