T.Tserenpurev: Heating Costs will Rise with Fair Competition Regulatory Authority’s approval
The UBpost has sat down with the Head of the Energy Management Commission T.Tserenpurev to discuss the reports regarding the increase of central heating price.
-Is it true that central heating prices will increase soon? How much will it increase by?
-Energy and heating producers and distributors have proposed to increase their price. Heating price will increase by 20 percent and electrical power by 15 percent. In actual fact, the price should increase more but we have reached an agreement to maintain the increase between 15-20 percent for the moment.
The 72th decree of the parliament states that the heating and electrical power price should be increased gradually so as to make the energy sector loss free by 2014. This decree has to be implemented by government agencies and ministries. Therefore, we are acting upon this mater. In 2012 we weren’t able to make changes to the price because, firstly, the elections took place and the Fair Competition Regulatory Authority has not approved it.
If we increase prices without consulting the Fair Competition Regulatory Authority, we will have acted against the law. All government organisations are to work in correlation with each other.
-If Fair Competition Regulatory Authority approves, will the prices go up?
-If the Fair Competition Regulatory Authority approves, the price change will be effective from January 1, 2013. Electricity prices are expected to rise by 1000 MNT per month on average and heating prices during winter is expected to increase by 6000 MNT per month.
People think that when energy prices go up, prices of common goods such as bread, milk and other food products will rise along with it but this is not the case. We have made some enquiries and according to them if the prices should go up in the above amount, price of each Atar bread should rise by 6 MNT. Households with average income level and consumption may remain calm because they will pay the increase only if they should consume more than 150 kilowatts per month. The price change will affect enterprises and factories more. But this is if the Fair Competition Regulatory Authority approves.
The price increase will also lessen the loss of railways that transport coal as well as coal mines. 60 percent of the increased price is expected to go to railways and mines. At the moment, coal mines used for energy generation operate at a loss of around 15 billion MNT a year and rails at 10 billion MNT.
-What is the base for the increase in price?
-All the organizations related to energy distribution have made a request to increase price because this year, the sector is facing a loss of more than 50 billion MNT. To increase their price they need approval from Energy Management Commission and the Fair Competition Regulatory Authority in accordance with the energy law and fair competition law.
We have reported about this issue to the Fair Competition Regulatory Authority earlier this year in February. We have sent an official letter to them in May and in November 2, I have met with the Head of Fair Competition Regulatory Authority O.Magnai, to request an immediate response regarding this issue. He said that they have new management in place and as soon as the internal management is sorted, they will make their response.
Short URL: http://ubpost.mongolnews.mn/?p=2154
-Is it true that central heating prices will increase soon? How much will it increase by?
-Energy and heating producers and distributors have proposed to increase their price. Heating price will increase by 20 percent and electrical power by 15 percent. In actual fact, the price should increase more but we have reached an agreement to maintain the increase between 15-20 percent for the moment.
The 72th decree of the parliament states that the heating and electrical power price should be increased gradually so as to make the energy sector loss free by 2014. This decree has to be implemented by government agencies and ministries. Therefore, we are acting upon this mater. In 2012 we weren’t able to make changes to the price because, firstly, the elections took place and the Fair Competition Regulatory Authority has not approved it.
If we increase prices without consulting the Fair Competition Regulatory Authority, we will have acted against the law. All government organisations are to work in correlation with each other.
-If Fair Competition Regulatory Authority approves, will the prices go up?
-If the Fair Competition Regulatory Authority approves, the price change will be effective from January 1, 2013. Electricity prices are expected to rise by 1000 MNT per month on average and heating prices during winter is expected to increase by 6000 MNT per month.
People think that when energy prices go up, prices of common goods such as bread, milk and other food products will rise along with it but this is not the case. We have made some enquiries and according to them if the prices should go up in the above amount, price of each Atar bread should rise by 6 MNT. Households with average income level and consumption may remain calm because they will pay the increase only if they should consume more than 150 kilowatts per month. The price change will affect enterprises and factories more. But this is if the Fair Competition Regulatory Authority approves.
The price increase will also lessen the loss of railways that transport coal as well as coal mines. 60 percent of the increased price is expected to go to railways and mines. At the moment, coal mines used for energy generation operate at a loss of around 15 billion MNT a year and rails at 10 billion MNT.
-What is the base for the increase in price?
-All the organizations related to energy distribution have made a request to increase price because this year, the sector is facing a loss of more than 50 billion MNT. To increase their price they need approval from Energy Management Commission and the Fair Competition Regulatory Authority in accordance with the energy law and fair competition law.
We have reported about this issue to the Fair Competition Regulatory Authority earlier this year in February. We have sent an official letter to them in May and in November 2, I have met with the Head of Fair Competition Regulatory Authority O.Magnai, to request an immediate response regarding this issue. He said that they have new management in place and as soon as the internal management is sorted, they will make their response.
Short URL: http://ubpost.mongolnews.mn/?p=2154
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