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Manufacturers mull impact of electricity price hike
Several major manufacturers have indicated they have no plans to put up the prices of their products, despite the rising cost of electricity.
Electricite du Laos, which is the country's monopoly supplier, announced last month it would raise the price of electricity by 3 percent per month from March to December, and by 2 percent per month from next year until 2017. The extra income generated will be ploughed into hydropower development.
When asked about their intentions in light of the increase in costs, a water supplier, a cement producer and a steel maker said this week they would wait and see to what extent they were affected by the increase before making any changes to the price of their products and services.
Vientiane Water Supply Enterprise Director Mr Khampheuy Vongsakhamphouy said “We'll have to wait and see the impact of the higher electricity charges; there's no sense in putting up prices just because we know the price of energy will increase.”
He admitted that paying more for electricity would negatively affect the operations of the enterprise because electricity is used in the pumping and treatment processes. But he believed it was better to keep the price of water unchanged to protect consumers.
Electricity consumers can expect to feel the impact of the higher charges this month when they get their bills for March consumption.
A manager at the Lao Cement Factory said he and colleagues were aware of EDL's announcement about the price hike but did not plan to raise cement prices from the current range of 710,000 kip to 78,000 kip per tonne.
He said it wasn't just the price of electricity that was rising, but also the price of coal, fuel and transport. This was placing pressure on cement producers to adjust their prices in turn so they could stay profitable.
“We will have talks with other cement producers on the impact of the price hike before deciding whether to adjust the price of cement,” he said, adding that the Ministry of Industry and Commerce had the power to approve any price increase.
A senior official with Vientiane Steel Industry said the company's management was studying the impact of the rising cost of electricity on its operations. He said it was possible the company might put up their prices in the future as electricity is one of their main inputs.
Vientiane Steel Industry currently sells steel for 8 million kip per tonne, according to the official.
The operator of an ice making plant, which is a major consumer of electricity, also said there were no immediate plans to put up prices, even taking rising inflation into consideration. But he said the increase in the price of electricity would force the company to adjust its prices sometime this year, adding that a three percent increase each month was very high.
vientiane times
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