Laos: Electricity Rate Price Hike Causes Stir Among Residents

• Apr 30, 2020

An increase in electricity rates has taken Lao residents by surprise amid an economic downturn due to the Covid-19 pandemic, with many turning to social media to air their complaints.

In March, the Prime Minister’s Office accepted a proposal to increase the electricity rate incrementally from 2020 to 2025, set to begin from 1 May this year. Under the scheme, residential electricity rates are to gradually increase each year, with prices for two brackets of usage, firstly from 0 to 150 kWh per month, and then for use of 150 kWh and above.

Rates vary for residential, industrial, agricultural, and business use, while different rates apply for educational institutions, embassies, and some other organizations.

However, the rate increase is not set to begin until 1 May, in line with the notice issued by the Prime Minister’s Office, signed by Dr. Phet Phomphiphak, Head of the Prime Minister’s Office and Minister to the Prime Minister’s Office.

Electricite du Laos, a state enterprise under the Ministry of Energy and Mines, issued a notice on 11 April confirming the increased rates will commence from 1 May this year.

Residents have begun taking to social media to complain about high electricity bills, which have come at a time when many are feeling the effects of the Covid-19 pandemic. Amid increased unemployment and bleak prospects, many had hoped the government would offer assistance.

Deputy Prime Minister Dr. Sonexay Siphandone made a recommendation that utility rates for electricity, water, and internet be decreased temporarily, however, a proposal made at the monthly cabinet meeting to reduce value-added tax on electricity and water utilities during the crisis period was not approved as it would affect revenue collection.

The government has laid out policies and measures to reduce and defer the payment of tax, customs, and other administrative fees during the coronavirus outbreak, and lowering the basic interest rate charged by the Bank of the Lao PDR.

Economic growth of only 3.3 percent is forecast for this year, the lowest rate in over thirty years since Laos began its market-oriented economic policy of 1986.

Vientiane’s Vte9 Channel news program recently interviewed several consumers about their latest electricity bills (Lao language):