Govt prepares Rs 1b subsidy to promote use of induction stove

Published On: March 27, 2020 07:43 AM NPT By: Republica  | @RepublicaNepal

Households consuming up to 150 units to get 20% discount

KATHMANDU, March 27: The government is preparing to implement a subsidy plan worth around Rs 1 billion to promote use of induction stoves.

The Ministry of Energy, Water Resources and Irrigation on Thursday directed the Nepal Electricity Authority (NEA) to provide 20% discount on electricity bills of up to 150 units for domestic consumers. It, however, is not clear how the government will identify household using induction stoves.

The decision comes at a time when the country is facing a slowdown in supply of liquefied petroleum (LP) gas – a popular cooking fuel – due to the ongoing lockdown in Nepal and India – the only supplier.

“There are 3.65 million domestic consumers who consumes less than 150 units. They pay a total of around Rs 5 billion every month in electricity bills,” Minister for Energy, Water Resources and Irrigation, Barsha Man Pun, told Republica over phone. “The 20% discount means we will be giving subsidy of Rs 1 billion every month. We plan to implement the subsidy plan within mid-April.”

According to Pun, the ministry is holding a meeting with NEA's board of directors regarding the action plan and its implementation very soon. He said that the discount on electricity bill will help in displacement of LP gas to some extent.

“We need to import LP gas from India, while electricity is our own production. If local production is used, the money will remain in the country and will contribute to reduce trade deficit,” he said, appealing to the people to use induction stoves in their kitchens.

Officials of the NEA said they will execute the subsidy program if the government wants. “We need to prepare an action plan to implement the program. But if the plan is to provide subsidy as a form of relief due to the coronavirus crisis then it cannot be said that the plan is impractical,” Prabal Adhikari, the spokesperson at the NEA, said.

However, NEA officials say that there is no mechanism to identify household consumers using induction stoves in their kitchens. “Energy meters measure energy; it doesn't know what appliances were used,” Adhikari said, adding: “The plan can be implemented after preparing a clear action plan, target beneficiaries and the time period.”

The government, in a bid to increase consumption of electricity, has been asking people to shift to induction stoves. “It is an attempt to encourage the use of induction stoves. All consumers using up to 150 units of electricity in a month will benefit from this subsidy program,” Minister Pun added.

The demand for electricity has dropped after the announcement of nationwide lockdown because of coronavirus (COVID-19) pandemic. Average daily demand for electricity stands at 1200 MW during peak hour on normal days which has fallen to 945 MW even in peak hours.

Meanwhile, a high-level committee of the government on Wednesday decided to waive off customs duty on the import of induction stoves. The government had been using 15% customs duty on the import of induction stoves.

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