(THAI BUSINESS ASSOCIATION OF MYANMAR)

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Author: Ei Thandar Tun :The Ministry of Electricity and Energy announced that it will raise the rate for electricity in Myanmar starting from July 1. The rate increase will generate more revenue from the ever-loss-making industry, the revenue will be used to improve power generation, distribution and increase access to electricity

This move is made just a year before elections, it is stirring both criticism and support from those who don’t back the plan and those that do. Those that support the increase pointed out that other areas of the country are already paying higher electricity rates than Yangon.

Due to the new rate, those who are using over 100 units of electricity will have to pay double. The ministry explained that the decision to raise the rate was decided after meetings with representatives of various sectors, organizations and exports. 

“It is not ok if the power blackouts keep occurring after the rate is raised. We need to have better services,”commented a Yangon resident.

For household use, the rate was K35 per unit for 1-100 units. Now, it is raised to K35 per unit for 1-30 units, K50 for 31-50 units, K70 for 51-75 units and K90 for 51-100 units. In this way, the rates are raised accordingly. The rate for over 200 units of electricity is raised to K125 from K50. (See the table)

For example, if you use 100 units of electricity in the household category, it would cost you K3,500. But starting on July 1 the fee will be K6,050 for the same unit consumption. Before, it would cost you K4,000 for using 200 units of electricity, now it will be K11,500.

“Doubling the electric bill can be a financial burden on everyday people. We need to use less electricity as we have to pay around K40,000 up from K20,000. There is no point of objecting as it won’t change,”said Daw Thida Oo, a resident in Yangon.

For industrial use, the rate will be raised to K125 per unit for the electricity usage of 1 to 500 units, K134 for 501-5,000 units, K145 for 5,001-10,000 units, K155 for 10,001-20,000 units, K165 for 20,001-50,000 units, K175 for 50,001-100,000 units and K180 for 100,0001 units and up.

“The electricity prices are now doubled. This can cause price inflation. We are not saying we shouldn’t raise the rates. But we are saying that it will have impact on the productivity of the factories. Moreover, we are now paying around K800,000 for what is called maintenance on transformers. It should be reduced,”said U Tun, President of Myanmar Plastic Industries Association.

The World Bank’s economic monitor report also pointed out that the government needs to raise the electricity rate to improve its weak power distribution network.

Currently, the Ministry of Electricity and Energy is targeting to provide electricity to 55 percent of the country’s households by 2021, 75 percent by 2026 and 100 percent by 2030 according to its National Electrification Plan-NEP.