Wednesday, 6 March 2013

Myanmar's gas, electricity price on the rise as Ministry faces millions in losses

The senior spokesman of the Electric Power Enterprises, Myanmar made an announcement previous week that due to sudden increase in the price of electricity and natural gas, the Electric Power Ministry will compensate to the local people with an estimated US$430 million loss during the financial year of 2013-14.
The pricing system of the electricity stays constant then the ministry of Electric Power will have to face some loss because the electricity price and natural gas price will be increased by the General Transformer. This statement has been given by the General Manager of the Financial Department of MEPE on December 19.
He also disclosed that we buy the electricity at the normal rate and distribute to the Yangon Electricity Supply Board at the same rate for which the Ministry of Electric Power has to face loss. During the financial year of 2012-13, the Ministry of Electric Power faced loss of $21.9 million. The main providers of the electric power to the Ministry of Electric Power are Shwe Li Hydropower Generation Enterprise, General Transformer, Hydropower Generation Enterprise. The Ministry of Energy provides offshore natural gas to the Ministry of Electric Power. 
Hydropower Generation Enterprise provides the electric power to the Ministry of Electricity Power about 67% of their total requirement, General Transformer provides 23% and Shwe Li Hydropower Generation Enterprise provides only 10% of the total requirement of the country. The Ministry of Electric Power has decided that they will increase the contribution of electric power by the General Transformer about 31% after March 2013. He also added that their government has to buy more natural gas to cover up their demand.

The Ministry of Electric Power is purchasing the natural gas at the rate of $5 for each British Thermal Unit and after March 2013, the price of one British Thermal Unit will increase to $11.1966.
The Director of MEPE financial department told the Myanmar Times on December 19 that they were going to launch the standardized system for fixing the price of the electric power and the natural gas. This standardized system will be introduced on the international model and it will be provided by the foreign investment.
The Director of MEPE has also said that this rise in price will not give bad effects on the lower and middle class people and the system, which their government is going to be introduced in the country will be based on the amount of kilowatts on each unit, uses. She also declared that the household expenditure of electric power for 200 kw over one month costs K35 per unit and this household expenditure will increase to K50 per unit for 200 kw. The industrial units use more electric power and they expend between 10,000 to 15,000 kw per month and they will be charged with K75 per unit. If we make comparison with China and Thailand then we will find that China charges K72 per unit for each household expenditure of electric power and Thailand charges K50 per unit for one month.