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Electricity tariffs based on long-run marginal costs for central grid system of Oman


  • Malik, Arif S.
  • Al-Zubeidi, Salem


The electricity tariffs in Oman are subsidized and are based on a cost accounting approach and do not reflect the true cost incurred in generating, transmitting and distributing a kilowatt-hour of electricity at the consumer end. This paper presents the electricity tariff based on the estimation of long-run marginal cost at generation, 33kV, and 415 voltage level for Ministry of Housing, Electricity & Water (MHEW) interconnected power system of Oman. The result shows that at the generation level a marginal kW costs US$ 75per year and a marginal kWh costs 2.07¢/kWh. These costs increase as we move downstream from generation to consumer end. The average cost of electricity at the consumer end connected at 415V is 6.52¢/kWh or 25.17Bz/kWh.

Suggested Citation

  • Malik, Arif S. & Al-Zubeidi, Salem, 2006. "Electricity tariffs based on long-run marginal costs for central grid system of Oman," Energy, Elsevier, vol. 31(12), pages 1703-1714.
  • Handle: RePEc:eee:energy:v:31:y:2006:i:12:p:1703-1714
    DOI: 10.1016/

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    References listed on IDEAS

    1. Porat, Yigal & Irith, Rotlevi & Turvey, Ralph, 1997. "Long-run marginal electricity generation costs in Israel," Energy Policy, Elsevier, vol. 25(4), pages 401-411, March.
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    Cited by:

    1. Bermúdez, Alfredo & González-Díaz, Julio & González-Diéguez, Francisco J. & González-Rueda, Ángel M., 2016. "Gas transmission networks in Europe: Connections between different entry-exit tariff methodologies," Applied Energy, Elsevier, vol. 177(C), pages 839-851.
    2. Nakawiro, Thanawat & Bhattacharyya, Subhes C. & Limmeechokchai, Bundit, 2008. "Electricity capacity expansion in Thailand: An analysis of gas dependence and fuel import reliance," Energy, Elsevier, vol. 33(5), pages 712-723.
    3. Zekri, Slim, 2008. "Using economic incentives and regulations to reduce seawater intrusion in the Batinah coastal area of Oman," Agricultural Water Management, Elsevier, vol. 95(3), pages 243-252, March.
    4. Peeter Pikk & Marko Viiding, 2013. "The dangers of marginal cost based electricity pricing," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(1), pages 49-62, July.
    5. repec:eee:rensus:v:79:y:2017:i:c:p:533-543 is not listed on IDEAS
    6. Huang, Shih-Chieh & Lo, Shang-Lien & Lin, Yen-Ching, 2013. "Application of a fuzzy cognitive map based on a structural equation model for the identification of limitations to the development of wind power," Energy Policy, Elsevier, vol. 63(C), pages 851-861.
    7. Al-Badi, A.H. & Malik, A. & Gastli, A., 2009. "Assessment of renewable energy resources potential in Oman and identification of barrier to their significant utilization," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2734-2739, December.
    8. Kalampalikas, Nikolaos G. & Pilavachi, Petros A., 2010. "A model for the development of a power production system in Greece, Part I: Where RES do not meet EU targets," Energy Policy, Elsevier, vol. 38(11), pages 6499-6513, November.
    9. Al-Badi, A. & Malik, A. & Al-Areimi, K. & Al-Mamari, A., 2009. "Power sector of Oman--Today and tomorrow," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2192-2196, October.
    10. repec:eee:rensus:v:77:y:2017:i:c:p:706-717 is not listed on IDEAS
    11. Al-Badi, A.H. & Malik, A. & Gastli, A., 2011. "Sustainable energy usage in Oman—Opportunities and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3780-3788.


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