Myanmar: Despite Opposition, Ministry Says It Will Increase Electricity Prices

Myanmar: Despite Opposition, Ministry Says It Will Increase Electricity
Prices

The Ministry of Electricity and Energy will increase electricity prices
soon, said deputy minister Dr. Tun Lwin, citing an annual financial loss of
300 billion kyats concerning the electricity supply.

Pulaw Township lawmaker U Ohn Khin asked during the Lower House
parliamentary session on Monday if the government would adjust electricity
prices.

The production cost of electricity by state-owned and private power plants
is around 92 kyats per unit, but the price sold to users is 69 kyats on
average. The government then subsidizes 22 kyats for each unit used,
creating a loss of 337 billion kyats during the 2016-17 fiscal year, said
the deputy minister.

Because of the subsidies, the government is short of funds to invest in the
country's electricity production facilities for the benefit of national
development, said Dr. Tun Lwin. "So, we need to cover those costs," added
the minister.

Lawmaker U Ohn Khin said that residents in Tanintharyi (Tenasserim) Division
have to pay 350 to 650 kyats per unit for electricity from private
electricity producers, and that they would not use appliances such as
refrigerators or washing machines, even if they received them for free.

"They dare not use them due to the high electricity prices. When they buy
home appliances, they choose the ones that consume the least electricity,"
said U Ohn Khin.

The ministry, he argued, "can't increase electricity production because of
the loss." Its income would not increase as long as electricity production
itself does not increase, he said, adding that the local population is
growing. "So we have been in a vicious circle which should be stopped now,"
U Ohn Khin said.

Currently, only 38 percent of the country's population is connected to the
national grid, leaving 62 percent of the population without access to
government-supplied electricity, said the deputy minister.

"Only when those who have access to [government-supplied] electricity pay
reasonable electricity prices will we use the money which we have to
annually subsidize the building of new grids," said Dr. Tun Lwin.

The previous government attempted to increase electricity prices in November
2013, but aborted its plan in the face of strong opposition from the people.

Currently, households pay 35 kyats per unit for up to 100 units, and 40
kyats per unit for up to 200 units. Any units above 200 cost 50 kyats.

Industrial users pay 75 kyats per unit up to 500 units, 100 kyats from 501
to 10,000 units, 125 kyats from 10,001 to 50,000 units, and 150 kyats from
50,001 to 300,000 units. The unit price drops to 100 kyats for usage that
rises above 300,000 units.

At present, as the state-run power plants cannot produce additional
electricity, and the ministry has to purchase up to 51 percent of country's
total production from private producers. The government has to buy
electricity for 68 kyats per unit from private hydropower plants, and for
158 kyats per unit from private gas-fired power plants, according to the
deputy minister.

U Htay Aung, a hotelier in Yangon, has complained about the government's
plan to increase electricity prices.

"Things such as electricity and rail transportation are not meant to make
profit and it is the responsibility of the government to provide such
services. We are hardly making profits, and the price increase will surely
become a burden to us," he told The Irrawaddy.

Last Friday at a meeting between businessmen and military-appointed Vice
President U Myint Swe in Yangon, industrialists proposed tripling
electricity rates for household use to 150 kyats, and increasing industrial
use from 150 kyats to 175 kyats.

The ministry, in cooperation with the World Bank, is designing its tariff
policy and held workshops concerning new electricity rates in April and May,
attended by parliamentary committees, energy ministers of divisional and
state governments, and experts.

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Link to Original Article:
https://www.irrawaddy.com/news/despite-opposition-ministry-says-will-increas
e-electricity-prices.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com