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Zahid Rabbani
Let me begin by sympathizing with the citizens, who are suffering from price hikes of daily essential items. The government should rekindle hopes shattered because of the cruel blow of the rise in electricity prices. The government’s focus should be on providing relief to people, not politics.
Experts are terming the increase in base power tariff a violation of the NEPRA’s own rules and regulations, as any determination and execution of an increase in tariff comes about only after holding a public hearing, which never took place.
The government decided to raise the prices of all petroleum products, just a week after making a similar increase; hours after the National Electric Power Regulatory Authority approved a massive increase of Rs7.91 per unit in the power tariff.
Everyone knows the impact of the increase passed on to hapless consumers. It proved a social and economic disaster; pushing a few million people further down the poverty line, reducing the middle class and increasing the lower middle, hiking the crime rate, and deepening social chaos.
The decision has proved detrimental to the industries due to the high cost of doing business and has opened the floodgates of inflation.
In addition to making the electricity bills costlier and unaffordable for the consumers, the hike in base tariff has escalated the prices of all household goods being widely used in every household.
The electricity price increase has given a surge to multi-pronged and multiplying tragedy. Shopkeepers are paying more bills and are selling at higher rates. Hotel owners now pay additional bills and add them to customers’ charges.
With the new hike in the power tariff, the price of a unit has moved upwards. NEPRA has increased the electricity rates mainly because of fuel prices, capacity cost payments, and the impact of rupee devaluation against the US dollar. This is the highest average tariff rate for power consumers.
NEPRA’s decision to increase electricity tariffs has shifted the burden of power theft, mismanagement, and inefficiencies to consumers on the pretext of fuel adjustment.
The constant increase in power tariffs on the pretext of fuel adjustment has increased electricity prices and added to the already high cost of trade and industry.
Seeking comparable energy tariffs for domestic industries in order to capture the global market, due to high electricity rates, power theft has become rampant, as the tariff is unaffordable to consumers.
The government must adopt business-friendly policies, similar to those adopted by other neighboring countries in the region. Providing affordable electricity would assist in lowering production costs, thereby benefiting the public.
The recent increase in fuel and electricity rates has added to the miseries of the businesspersons, who are already feeling the heat of roaring inflation. The increase in fuel prices and tariff rates has brought about another flood of inflation in Pakistan as it has increased the cost of doing business in the country.
The most lamentable part of this hike is that it was avoidable. Had successive governments been able to improve their bill recovery over the last few years, they could have reduced sectoral losses and escaped lenders’ pressures for increasing the price of power.
The recoveries are stuck at 90pc of the billed amount, and the unrecovered 10pc meant Rs150 billion a year. Add another Rs300bn lost to theft and the sector loses its commercial viability. The tragedy has been unfolding that we, as a nation, have not been able to check.
Instead of improving efficiency, we have always depended on tariff increase, which quickly loses utility, as recoveries drop and theft increases, bringing the sector back to square one. The incredible increase in electricity charges has had a very bad impact on Pakistani citizens.
