Iran raises electricity prices for heavy consumers

Iran has decided to increase the price of electricity for top-band users as the country struggles to contain a growing demand for power which has been exacerbated by cryptomining activity in recent years.

Iran’s Energy Minister Ali Akbar Mehrabian said on Monday that electricity price hikes had been approved in a session of the Cabinet a day earlier.

Mehrabian said the new tariffs are meant to change electricity consumption behavior in Iran and to distribute heavy subsidies given by the government for electricity in a more balanced way.

The minister said most of electricity users in Iran will continue to pay a baseline rate of 4,000 rials ($0.013) per kilowatt hour (kwh) of electricity if their consumption does not exceed limits set by the state-run electricity company Tavanir for various climate regions.

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However, Mehrabian said the rates will increase to 6,000 rials per kwh for those who consume 1.5 times the cap, while those using two times the limit will pay 10,000 per kwh.

The minister said prices will more than triple to 14,000 ($0.046) per kwh for high-use customers whose consumption are triple the amount allowed in various seasons in each climate region.

The price hikes come as growing demand for electricity in Iran has caused brief power cuts in large cities in recent years while placing a heavy burden on the country’s Oil Ministry to supply enough fuels to power plants to respond to the rising demand.

Iranian Energy Ministry authorities say low tariffs have made it difficult to attract investment into the power sector. They insist that heavily-subsidized prices have mainly benefited the rich and those active in the cryptocurrency business.

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