Some wholesale businesses to jack up prices due to increased electricity charges

Some retail businesses in Myanmar have received notice from their wholesalers that prices for some commodities will be going up as electricity charges double starting this month.

“With the meter charges going up, some wholesale businessmen have distributed notices in writing letting us raise our prices as the cost of electricity is higher for the retailers,” one retailer told Eleven Media on Saturday.

The Ministry of Electric Power announced on Tuesday last week that those businesses using up to 5,000 units are required to pay Ks 100 (US$0.1) per unit while those using more than 5,000 units will need to pay Ks 150 (US$0.15) per unit as of November 1. They were previously charged Ks 75 per unit.

“As the electricity charge has increased, prices at the factory have also increased. Those prices of commodities produced mainly at the factory will be higher. We couldn’t risk selling our products at a loss. Our grounding factory increased our charges on November 1, before the Ks 150 rate became Ks 250,” said a businessman at Hlaing Tharyar Industrial Zone.

“I think all the businessmen will do it like that. We have to change into reasonable prices. If we look at the salary of the workers, we could raise it to a certain amount but then we wouldn’t be able to cover the cost increase. With the increase in electricity charges, we’re counting on them [employees] to help us cover the charges.”

Meanwhile, there is no plan to reduce electricity prices, Minister for Electric Powers Khin Maung Soe said on Wednesday last week.

The government is facing criticism over the short-notice raise in electricity prices—40 percent higher for private households and double for businesses—that took effect on Friday.

The surge in electricity prices will affect people from all walks of life.

“The unexpected increase in electricity charges has a direct and sudden effect on people, small- and medium-sized enterprises and other businesses. From my point of view, if the prices double, the Government should provide service to avoid electricity shortages, and make their services better,” said Soe Tun of the Myanmar Rice Industry Association.

According to Ministry of Energy calculations, domestic use of electricity is around 590 mmcfd (million cubic feet) per day (of gas). But only 240 mmcfd can be provided per day. Likewise, the need for crude oil is 60,000 barrels per day, but at the moment only 20,000 barrels can be used. Therefore, 75 per cent of Myanmar’s population faces difficulty receiving electricity.

According to the Shwe Gas Movement, about 12 billion cubic metres of natural gas will be sent through the Myanmar-China natural gas pipeline at Shwe Natural Gas in offshore Rakhine.

Source: ELEVEN Myanmar

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