As a part of new National Power Policy announced on Wednesday, the government has made more than a 50 percent increase in power tariff for industrial and commercial consumers from August 1 and for domestic consumers from October 1. There will be no change, though, in the rates for households using 200 units or less in a month. The concession will benefit as many as 64 percent of users who are least able to pay extra price. The average rate for the rest of domestic consumers will be about Rs 15.50 per unit.
Hardest hit by this new tariff plan will be the salaried middle class. While the prices of essential commodities have risen sky high and the surge in energy rates pushing the transportation costs and consequently every item of daily use, salaries have stayed the same or increased only marginally during the last few years.
Explaining the rationale for the increase at a news conference, Water and Power Minister Khawaja Asif said that since the burden of subsidies ultimately fell on people, an attempt had been made to burden those who could afford it to avoid accumulation of Rs 600 billion circular debt next year. Understandably, the government is under pressure from the IMF to remove subsidies and also to pay the circular debt that exacerbated the present energy crisis. However, the unpleasant reality is also that power theft is rampant. The minister himself acknowledged that theft and system losses cost up to Rs 200 billion a year. The thieves, he revealed in a TV talk show, include many members of the rich and influential sections of society. That in fact is not a new disclosure. From time to time press reports have been uncovering the names of prominent politicians and their relatives involved in electricity stealing for both domestic and industrial use. And law-abiding citizens who pay their bills regularly end up shouldering the burden of such thievery. It is worthwhile to note that if ordinary citizens do not pay their bills, the concerned authorities waste no time in cutting their supplies, but in the case of privileged classes, they tend to look the other way. No wonder the losses are as high as 200 billion a year.
Instead of raising power tariff for the salaried middle class already struggling to make ends meet, the government should focus on recovering dues from those who refuse to pay, such as consumers in parts of KPK, and the big power thieves in urban centres of both Punjab and Sindh. It is good to note that the government has already started a serious campaign against electricity and gas stealing in Punjab and KPK and plans to do the same in Sindh. Special measures are being put in place to ensure recovery of dues and punish the offenders. It should also rethink the 200-unit limit, extending it to consumers using up to 300 units per month who ill afford bearing an extra burden.
Thursday, August 8, 2013
Pakistan: Power tariff plan needs a rethink
As a part of new National Power Policy announced on Wednesday, the government has made more than a 50 percent increase in power tariff for industrial and commercial consumers from August 1 and for domestic consumers from October 1. There will be no change, though, in the rates for households using 200 units or less in a month. The concession will benefit as many as 64 percent of users who are least able to pay extra price. The average rate for the rest of domestic consumers will be about Rs 15.50 per unit.
Hardest hit by this new tariff plan will be the salaried middle class. While the prices of essential commodities have risen sky high and the surge in energy rates pushing the transportation costs and consequently every item of daily use, salaries have stayed the same or increased only marginally during the last few years.
Explaining the rationale for the increase at a news conference, Water and Power Minister Khawaja Asif said that since the burden of subsidies ultimately fell on people, an attempt had been made to burden those who could afford it to avoid accumulation of Rs 600 billion circular debt next year. Understandably, the government is under pressure from the IMF to remove subsidies and also to pay the circular debt that exacerbated the present energy crisis. However, the unpleasant reality is also that power theft is rampant. The minister himself acknowledged that theft and system losses cost up to Rs 200 billion a year. The thieves, he revealed in a TV talk show, include many members of the rich and influential sections of society. That in fact is not a new disclosure. From time to time press reports have been uncovering the names of prominent politicians and their relatives involved in electricity stealing for both domestic and industrial use. And law-abiding citizens who pay their bills regularly end up shouldering the burden of such thievery. It is worthwhile to note that if ordinary citizens do not pay their bills, the concerned authorities waste no time in cutting their supplies, but in the case of privileged classes, they tend to look the other way. No wonder the losses are as high as 200 billion a year.
Instead of raising power tariff for the salaried middle class already struggling to make ends meet, the government should focus on recovering dues from those who refuse to pay, such as consumers in parts of KPK, and the big power thieves in urban centres of both Punjab and Sindh. It is good to note that the government has already started a serious campaign against electricity and gas stealing in Punjab and KPK and plans to do the same in Sindh. Special measures are being put in place to ensure recovery of dues and punish the offenders. It should also rethink the 200-unit limit, extending it to consumers using up to 300 units per month who ill afford bearing an extra burden.
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