“Since the expenses of electricity production is in dollars, and the income is in dinars, the ministry has decided to increase the price of national electricity by 20 percent, given that the dollar-dinar exchange rate has increased,” Ministry of Electricity spokesperson Omed Ahmad told Rudaw English on Monday.
Ahmed said the rate hike should not be seen as “an increase in prices, but rather a step toward balancing the problem dinar devaluation has caused.”
In December, Baghdad announced a devaluation of the dinar as part of economic reforms to combat a national financial crisis.
The new price is 18 dinars per kilowatt hour for the first 450 kW used, up from 15 dinars.
The Kurdistan Region and Iraq suffer from chronic electricity shortages and dilapidated infrastructure. The failure of successive Iraqi and Kurdish governments to alleviate the chronic shortages since the 2003 war has been a near-constant source of public anger.
The region has 14 power plants, which altogether are currently providing nearly 4,000 megawatts of power, a record high in the Kurdistan Region according to data provided by Ahmad. However national electricity is only available an average of 10-12 hours per day and up to 16 hours in warmer areas.
"The reason behind the low hours of electricity is because despite our production being very high by global standards, the demand for electricity is currently at 7,300 megawatts, which is way higher than our production," Ahmad explained.
Theft of electricity and excessive consumption has exacerbated power shortages. In response, the KRG introduced new meters back in 2018. However, it failed to enforce their installation or monitor their usage, with residents finding ways to manipulate the devices.
The KRG approved a proposal in 2020 to privatize the Kurdistan Region's electricity sector, which the spokesperson claimed is getting close to implementation.
