That brings new meaning to the phrase "pay as you go".
If they are going to charge more for the water, the least they should do is use the money for building a desalinization plant or to pipe the water there from somewhere with an abundance of it. Paying more for less when it comes to essentials usually means someone wasn't doing their job to use tax money for the needed infrastructure. Trying to curb the demand of something with conservation doesn't work alone. Despite the best conservation efforts, conservation alone can't solve the problem, because it doesn't account for population growth. If a city or country doesn't increase the supply, it can't grow and will decrease in population as the citizens move to somewhere else that will meet their needs (or meet them more cheaply). This will cause a loss in tax revenue and only make matters worse in the long run. Just take a look at where I live, southern California. We had rolling blackouts because we were told to conserve instead of utilities increasing the supply of electricity. Now we have more electricity and higher efficiency products, but we lost a lot of businesses and jobs, and it cost the governor his job. Our state went from the 5th largest economy in the world in 2000 to broke as of yesterday. Soon we'll have plug in hybrids and electric cars. We don't have the infrastructure currently to support the load. Conservation is only half the solution. If you don't increase supply, you only buy some time to solve the problem at most. If you live in an area where improving the infrastructure isn't a priority, you may want to move somewhere else.