Gov’t Studying Water, Electricity Price Rise

Gov’t Studying Water, Electricity Price RiseGov’t Studying Water, Electricity Price Rise

Increase in water and electricity prices will be investigated in the next phase of the national subsidy reform plan, chief of staff of the president said, Fars news agency reported.

Mohammad Nahavandian said, “New financial resources for the electricity industry are anticipated in the government’s plan of action to end recession.”

The industry’s financial woes were partly addressed in the second phase of the subsidy reform plan, according to Nahavandian, and will be taken into account in its next phase as well as the national budget for the calendar year that begins in March 2015.

“Electricity industry has experienced slow growth and rising debts due to cuts in its financial resources, he said, adding that Iran has potential to increase construction of power plants and improve electricity supply and distribution.

Earlier this year, energy minister Hamid Chitchian lamented that the substantial gap between real and subsidized prices of water and electricity has caused difficulties for the energy ministry.

The subsidy reform plan was passed by parliament in January 2010. As part of the energy subsidy reform, the government announced in early 2014 that electricity prices would increase by 25 percent as subsidies were scaled back.

The government aims to curb high consumption and reduce pressure on power generation system, particularly during peak demand.

“Estimates suggest that Iran can become a major supplier of energy, especially in terms of electricity delivery in the region; a goal which demands huge investments,” the official noted.

He stressed that the government has plans to draw on domestic and foreign private companies to increase investment in the electricity industry.