PARAMARIBO, Suriname, CMC—The Suriname government says it will provide a subsidy to electricity consumers with a monthly consumption of up to 900 kWh even as it plans to increase electricity prices by 61 percent as part of a measure to reduce the sector’s annual subsidies of SRD4.5 billion (one SRD = US$0.02 cents).
According to a statement issued by the official Communications Services Suriname (CDS) following what has been described as “intensive discussions and efforts to implement reforms that are beneficial to society,” the government has decided that until June, households with a consumption of up to 900 kWh per month will be supported with a subsidy of up to SRD400.
“This means that 95 percent of consumers are entitled to this subsidy,” the CDS said.
Last week, the government announced it was moving to reduce the annual SRD4.5 billion it pays in electricity rates and intended to reduce that figure to SRD 2.4 billion this year.
It said that the increase would occur in phases. The first phase, which began on March 6, will result in consumers paying an average of 40 percent more, while in two months, an additional seven percent will be added.
“From March 6, the energy tariff for households will be increased by an average of 40 percent,” said David Abiamofo, Economic Affairs, Entrepreneurship and Technical Innovation, Social Affairs and Housing, Natural Resources.
He said the new rates will also be based on the exchange rate that the Central Bank quotes for the US dollar instead of the fixed SRD 30 per US dollar used until recently.
The government has said that phasing out the subsidy is necessary, indicating that it has been a difficult choice but that this will probably be one of the last painful measures.
Observers note that by phasing out the subsidy, the government is meeting one of the conditions set by the International Monetary Fund (IMF) for providing financial assistance to Suriname.
According to the latest CDS statement, the government’s policy is to transform subsidies but at the same time, support vulnerable groups and small and medium-sized enterprises (SMEs).
SMEs that suffer losses due to the abolition of the electricity subsidy are eligible for tax benefits, while social organizations can apply for support through the Energy Authority of Suriname (EAS).
“The government must ensure the well-being of society during the transition period,” the CDS said, adding that an extensive media campaign will be launched to inform citizens about the measures and encourage them to embrace energy efficiency and switch to renewable energy where possible.
The CDS added, “We will closely monitor the implementation of these measures and make adjustments as necessary to ensure no one is left behind during this transition period.”
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