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Ministry has not confirmed K32 billion profit from new electricity tariffs

The Ministry of Electricity and Energy (MOEE) has yet to confirm that the electricity tariff hike that starts from July will result in the electricity sector making a profit of K32 billion for fiscal 2019-20, which begins on October 1 this year and ends September 30, 2020.

Joint Public Account Committee (JPAC) vice chair U Aung Min said on August 21 that the tariff hike would result in the loss-making electricity sector making a profit this year. “The sector will not be losing out this year but make a profit of K32 billion from the tariff hike,” he said to the Pyidaungsu Hluttaw on August 21.

U Aung Min said the profit forecast made by the JPAC was based on the calculations made on the MOEE’s budget proposal for the coming fiscal year.

In a reply on August 22, MOEE deputy permanent secretary U Soe Myint said the ministry does not know what data the JPAC comments were based as the ministry does not have such data.

“We can’t confirm the report as we haven’t even received the tariffs under the new rates that started from July. People are still paying and we’re likely to know only early September,” he said.

U Soe Myint did explain that the ministry did forecast a total profit of K735 billion for the fiscal 2019-20, with energy sector contributing K703 billion and the remainder coming from electricity sector.

For MOEE’s proposed budget, the summary distributed to lawmakers showed that the ministry would still have a deficit of K704 billion after taking into account that revenue has been forecast at K7.45 trillion while expenditure has been forecast at K8.16 trillion.

U Soe Myint also said that for the coming fiscal year, each ministry’s budget calculation was based on the new electricity charges. “The new electricity charges took effect from July but all ministries were informed ahead as the new budget was being drafted in April,” he said.

U Soe Myint said before the tariff hikes were made public, there were discussions with all ministries and they were advised to propose a higher budget allocation for their respective ministries to offset the higher electricity costs,” he added.

Source: Myanmar Times

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