Burma Parliament Likely to Approve Electricity Price Rise

By Nyein Nyein 18 March 2014

A Burma government proposal to increase how much people pay for electricity is likely to be approved by Parliament following discussion Monday, lawmakers said.

Limited power infrastructure and generation mean that less than 30 percent of the country’s households have access to electricity. The government argues that consumers must pay more for power as the country attempts to extend access and meet fast-rising demand.

According to the government-owned New Light of Myanmar newspaper, Minister of Electric Power Khin Maung Soe told Parliament that increases were necessary to fund more investment in the power sector, since consumption across the country is going up by about 15 percent a year.

Parliamentarians agreed in principle to a planned price hike, drafted by President Thein Sein’s office, which it is claimed would have little impact on most families and small- and medium-sized businesses. The plan would reportedly save 272 billion kyat, or about US$272 million, from the government’s annual spending on supplying power.

According to lawmakers, the proposed changes presented to Parliament would mean larger users of power pay more, while the rates for low-level consumers stay the same.

For households using under 100 kilowatt hours, or units, per month, the price would remain at 35 kyat (less than US$0.04) per unit. The price would rise to 40 kyat per unit for those using between 101 and 200 units in a month, and to 50 kyat for those using more than 200 units.

For businesses, the basic charge for those using less than 500 units per month would remain at the current level of 75 kyat. But large consumers using over 500 kyat would pay 150 kyat per unit.

According to figures from the Ministry of Electric Power, 56.6 percent of households do not use more than 100 units per month, and 55.6 percent of businesses use less than 500 units.

“The minister said that therefore it would not much impact on those parts of populations, because of a slight price hike,” added Khin Saw Wai, an Arakanese lawmaker representing Rathaetaung constituency.

Rising the price of power in Burma is hugely unpopular, and despite the government’s reassurances, Rangoon residents have expressed concerns that the energy price hike will impact them through rises in the cost of goods. Previous attempts to raise the price of electricity met with protests, and in November Parliament rejected a proposed price rise from the Ministry of Electric Power.

Power from the national grid is heavily subsidized, but does not reach many residents and businesses, and supply is often intermittent, forcing the widespread use of private power generation. Generators, usually fueled by diesel, can be up to 10 times more expensive than using power from the grid.

The minister said the new plan would cut government spending on power from 284 billion kyat (about $284 million) to just 12 billion kyat, according to Lower House lawmaker Khaing Maung Yi, who represents Rangoon’s Ahlone constituency.

Khiang Maung Yi, a long-term critic of the government’s management of the power sector, called for more transparency on how international aid to the power sector is spent. The Asian Development Bank, Japan and the World Bank, among other international donors, have pledged large amounts to help to extend access to electricity.