The government led by Prime Minister G.Zandanshatar is working to liberalize energy prices by the end of this year. Under the plan, prices will be freed from fixed setting by the state and the Energy Regulatory Commission.

Cabinet members say the long-debated issue is expected to be resolved once and for all.

The Energy Regulatory Commission last raised consumer electricity tariffs on November 15, 2024. At that time, the average electricity price for households and businesses was set at MNT 216 per 1 kWh, bringing it closer to actual costs.

In November 2024, the Energy Regulatory Commission also increased heating prices by an average of 85%. The decision was scheduled to take effect on May 16, 2025, but was later postponed until 2027 due to concerns that it would raise inflation and negatively affect citizens’ livelihoods.

If heating prices are adjusted to actual costs, the price in the capital alone would reach MNT 1,012.

In a statement on March 24, Minister of Economy and Development J.Enkhbayar said the increase in energy prices is estimated to raise inflation by 1.5-2.4%. “The share of energy costs in a household’s monthly income has decreased. Compared with other countries, our energy prices are low. In the future, energy demand will increase every year,” he said.

Despite higher electricity prices, new power sources and expanded capacity, the energy sector continues to operate at a loss of trillions of tugriks. Liberalizing prices would help reduce losses and attract investment into the sector.

Published Date:2026-03-25