The government announced that it will increase electricity rates for both residential and business users starting from July. This is the first change in power tariffs since 2014.

The Ministry of Electricity and Energy (MOEE) proposal to change the rates was approved by parliament in April.

Myanmar’s electricity price is currently financially unsustainable, with rates being the lowest in ASEAN and have remained unchanged despite years of deliberation.

The residential rate is even lower. At present, the wealthiest residents in Yangon purchase subsidised electricity below cost. The state subsidy on power supply is a key obstacle to attract investors to scale up the much-needed power generation. The government has been distributing electricity to the public at a loss of K507 billion in 2017-18 fiscal year. That amount has climbed to K630 billion 2018-2019, according to data from the Ministry of Planning and Finance. Blackouts in Yangon have also severely affected manufacturers and businesses.

Under the new rates, residential households and religious buildings will continue to pay at the previous rate at K35, but only for up to 30 units. Consumers will be charged K50 for 31-50 unit, K70 for 51-75 unit, K90 for 76-100 unit, K110 for 101-150, K120 for 151-200, K125 for over 201.

Consumers who used to pay K3500 for 100 units will now be paying K6050, a 72.9 percent increase.

For business consumers including companies, factories, government buildings, embassies, and international organisations, they will have to pay K125 per unit up to 500 units, increasing by K10 until 50,001-100,000 units.  K180 per unit will be charged for over 100,000 units.

Currently, the government incurs costs of K89 per unit to generate and distribute electricity from hydropower, and K178 per unit for electricity from natural gas, according to the MOEE.

In terms of charges for end-users, per-unit prices of electricity for households are K35 from 1 unit to 100 units; K40 from 101 to 200 units; K50 above 201 units and street lights. For businesses the charges are K75 from 1 unit to 500 units and up to K150 per unit above that.

This is a developing story. The article will be updated shortly.

Graph: The Global New Light of Myanmar