Myanmar increases power prices drastically

Reading Time: 2 minutes

Yangon electricityFaced with growing production costs, Myanmar’s Ministry of Electric Power announced end-October that in November it would raise electricity rates for households by 43 per cent, from 35 to 50 kyat per unit, for every unit used over 100 kilowatt hours, according to the Myanmar Times.

Commercial users, meanwhile, will find themselves paying 50 per cent more, or a total 150 kyat, for each unit consumed above 5000 units (1 US dollar = 972 kyat).

The move is intended to reduce public subsidies for electricity and to encourage private investment in the sector. But higher bills could drive more businesses into already rampant fraud, said U Khin Maung Win, deputy director general of the Department of Electric Power. The use of bribery to achieve a more favourable meter reading is said to be widespread.

“We are taking action against illegal users, which is a constant problem,” said U Tun Kwei, chief engineer at the Ministry of Electric Power in Yangon Region. “The changes we’ve announced are quite fair and will not be a burden for the public. But businesspeople and industrial users will have to pay more, which we anticipate will result in more illegal users.”

“We need to crack down on illegal electricity use before private investors enter the electricity production and distribution sector,” said U Zeya Thura Mon, chief executive officer of the privately owned Myanmar Central Power Company.

Myanmar’s government-subsidised electricity prices are low compared to those of regional countries, and the government is hoping to reduce public spending as it waits for several energy plants to come online.

The average cost of producing one unit of electricity from hydropower dams, coal-fired power plants and natural gas-fired plants is 75 kyat, for which the government pays a total of $191 million each year to cover both production and distribution, U Tun Kwei said.

With only 30pc of the country having access to electricity, the new rates are designed to discourage consumers from heavy power usage, though some experts believe the latest move is counterproductive.

“In some countries, heavy electricity users get a discounted rate, but here those users already have to pay more, even though we don’t get 24-hour supply,” said U Myint Zaw, vice president of the Myanmar Industrial Association. “Increasing the costs to manufacturers can limit how much the country can produce.”

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Reading Time: 2 minutes

Faced with growing production costs, Myanmar’s Ministry of Electric Power announced end-October that in November it would raise electricity rates for households by 43 per cent, from 35 to 50 kyat per unit, for every unit used over 100 kilowatt hours, according to the Myanmar Times.

Reading Time: 2 minutes

Yangon electricityFaced with growing production costs, Myanmar’s Ministry of Electric Power announced end-October that in November it would raise electricity rates for households by 43 per cent, from 35 to 50 kyat per unit, for every unit used over 100 kilowatt hours, according to the Myanmar Times.

Commercial users, meanwhile, will find themselves paying 50 per cent more, or a total 150 kyat, for each unit consumed above 5000 units (1 US dollar = 972 kyat).

The move is intended to reduce public subsidies for electricity and to encourage private investment in the sector. But higher bills could drive more businesses into already rampant fraud, said U Khin Maung Win, deputy director general of the Department of Electric Power. The use of bribery to achieve a more favourable meter reading is said to be widespread.

“We are taking action against illegal users, which is a constant problem,” said U Tun Kwei, chief engineer at the Ministry of Electric Power in Yangon Region. “The changes we’ve announced are quite fair and will not be a burden for the public. But businesspeople and industrial users will have to pay more, which we anticipate will result in more illegal users.”

“We need to crack down on illegal electricity use before private investors enter the electricity production and distribution sector,” said U Zeya Thura Mon, chief executive officer of the privately owned Myanmar Central Power Company.

Myanmar’s government-subsidised electricity prices are low compared to those of regional countries, and the government is hoping to reduce public spending as it waits for several energy plants to come online.

The average cost of producing one unit of electricity from hydropower dams, coal-fired power plants and natural gas-fired plants is 75 kyat, for which the government pays a total of $191 million each year to cover both production and distribution, U Tun Kwei said.

With only 30pc of the country having access to electricity, the new rates are designed to discourage consumers from heavy power usage, though some experts believe the latest move is counterproductive.

“In some countries, heavy electricity users get a discounted rate, but here those users already have to pay more, even though we don’t get 24-hour supply,” said U Myint Zaw, vice president of the Myanmar Industrial Association. “Increasing the costs to manufacturers can limit how much the country can produce.”

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