Approximately $454 million is added to the Energy Ministry's debt to the private sector every year, the Energy Ministry’s spokesman for the power department said.
"Although the ministry paid $1 billion of its dues to private contractors last year, it still owes them an estimated $2.7 billion," Mostafa Rajabi Mashhadi was quoted as saying by ISNA Sunday.
Privately-owned power plants purchase one cubic meter of natural gas for 0.04 cent and convert it to power [based on energy conversion agreements]. The electricity is sold to the ministry at 0.9 cent per kilowatt hour and this is while consumers are charged as low as 0.6 cents for the same amount.
Depending on infrastructure and geography, electricity rates can vary widely by country. Among developed countries, Sweden has some of the cheapest electricity in the world (at 21 cents/kilowatt hour]. Germany, Belgium, Italy and Spain topped the list of countries with the highest tariffs worldwide in 2018. They were charged (in descending order) around 33 cents, 28 cents, 27 cents and 26 cents per kilowatt hour plus value added tax.
Nonetheless, Indians, Chinese and Argentineans paid as low as 8 cents, 7 cents and 1 cent respectively for the same amount of power. In Turkey, electricity prices stood at 15 cents per kilowatt hour. In Brazil, electricity users paid 13 cents per kilowatt hour in 2018.
Huge Gulf
Due to the gap in real energy costs and the bills consumers pay, the government must annually pay at least $450 million to the ministry (which it does not due to financial constraints), Rajabi said.
“Government debt to the Energy Ministry related to the disparities between real electricity costs, including distribution, transmission and generation, and what consumers actually pay, has reached $1.8 billion.”
Rajabi noted that the low electricity tariffs have encouraged many, especially in the agriculture and household sector, to waste electricity.
Iran's average electricity consumption growth rate is around 7% a year, almost 3.5 times over and above the global average, which is alarming. The number of electricity meters nationwide has reached 35.5 million.
