In the last decade desalination has been considered as a solution for potable water needs only for specific water scarcity countries having cheap fuel. Now, desalination is extensively used, even where it was unthinkable twenty years back, due to reduction in desalination cost. The cost reduction is due to new developments and improvements in desalination technologies, particularly in RO technology. The RO is a well accepted technology due to recent increase in energy prices and takes up a major share in worldwide market. But, it is not able to achieve its proper share in the Arabian Gulf market due to difficult seawater composition and extensive historical use of thermal desalination. But RO still has potential in hybrid systems in the Arabian Gulf to account for seasonal and night to day fluctuations in the demand for power and water. There is a need for an accurate methodology for evaluation of desalination costs to help in selection of appropriate technology suitable for a specific location, for process design and other requirements. However, existing methodologies and software packages do not account for all the parameters that contribute for desalting cost and their accuracy is limited to specific conditions. This paper presents an overview of the trends in desalination costs for major desalination technologies like Multi Stage Flash, Multi Effect Distillation and Reverse Osmosis and review of costing methodologies.