Electricity hikes

Two electricity tariff hikes in two days have confirmed the feeling of chaos at the helm. The grim news came first on Tuesday when the government approved a Rs0.53 per unit tariff hike. With the Central Power Purchasing Agency having recommended a Rs1.86 per unit hike, the lower tariff approval could be seen as a relief. However, only a day later, the Economic Coordination Committee (ECC) approved a further tariff increase of Rs0.30 per unit. The fact remains that price hikes in tariffs are doing nothing to improve the situation of circular debt in the power sector, nor are they bringing down losses, which is an issue that continues to remain inexplicable.Instead of offering a proper plan to solve the financial problems in the power sector, the government has continued to do the bare minimum it has agreed to in the IMF structural adjustment package. This is not a surprise. Pakistan agreed to readjust electricity tariffs on a quarterly basis with the IMF. That, however, is not good news for citizens, who have already been facing the brunt of high inflation and the depreciating value of their incomes.The government has claimed that it has done the best it can to protect lower income consumers, exempting from the tariff increase those consuming less than 300 per unit. The same amount has been transferred to higher-usage consumers. The trouble is that Pakistan needs a proper policy to reform the power sector. Continuous price hikes are an unnecessary burden on the public which can be removed through proper policymaking and implementation. This is something that the government has had over a year to do. However, it tragically continues to make the same mistakes as those before it. Price hikes are not the solution to the power-sector problems. Moreover, even if they are part of a package of answers, it gives little confidence to see two separate price hikes come in one day. There appears little hope that there will be a permanent solution found to the trouble in the power sector. In the meanwhile, the public will continue to suffer.

from The News International - Editorial https://ift.tt/2VcG8f6