12:00 AM, March 06, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Power tariff hike in the offing?

Power tariff hike in the offing?

Poor to face the brunt

2014 was the year when electricity prices were supposed to drop. Yet, with the government's mid to long term plans for large-scale plants running on gas in a shambles, it has had to resort to extended terms for expensive rental power plants. The net result, as expected, is another round of power tariff hike. With the government footing a subsidy to the tune of Tk. 6,000 crore per annum, the move is not too surprising. What is surprising, however, are the reported plans to make the poorest sections of society who consume less than 75 units of power pay an excess of Tk. 1.37 per unit, whereas the largest well-to-do residential consumers (consuming more than 600 units) pay an additional Tk. 0.2 per unit.
Indeed, apart from the rich consumers, every other slab of consumer will be hard hit. We are perplexed as to why the average consumers are being squeezed in this manner. And it is not only the poorer power subscribers who will be hit. Industrial and commercial users are all going to be paying significantly more than the air-cooled households of upper middle class and above. Indeed, a productive sector like agriculture, that is hugely dependent on power pumps, is likely to see its unit price rise by Tk. 1.51 from the current Tk. 4 per unit, a rise of nearly 50 per cent. If the rates are actually hiked in that way, it will usher in a new round of price inflation.
Rationalisation of electricity pricing is imperative. Though the state cannot be expected to provide subsidies indefinitely, it must adjust the pricing level in a manner that will be more equitable and buttressed by a reduction in systemic losses.


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