Power increase

 
January 23, 2021

At a time when people across the nation are already struggling with inflation in the prices of all kinds of goods and commodities, Energy Minister Omar Ayub, flanked by Planning Minister Asad Umar...

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At a time when people across the nation are already struggling with inflation in the prices of all kinds of goods and commodities, Energy Minister Omar Ayub, flanked by Planning Minister Asad Umar and PM's Special Assistant Tabish Gohar, has announced a Rs1.95 increase in the price of each unit of energy. For most households, this would mean a substantial rise in the electricity bills that they pay each month. The minister has said the increase was necessitated by the government's heavy spending on Covid-19, which prevented it from giving a further subsidy to people, and most of all by the flawed policies of the PML-N government, which the current government says had reached badly worked out contractual agreements with IPPs and made other mistakes which made it inevitable that the power tariff would have to be pushed up. He said the main achievement of the PTI government so far had been to overhaul a flagging electricity network and put right units which had been closed due to disrepair with 50 percent of the infrastructure salvaged in this manner.

While all this may be all correct, and we do know there has been mismanagement in the past, the news is obviously terrible for domestic consumers, as well as those who run small workshops and plants for stitching clothes or other units. The Rs1.95 per unit increase amounts to a large amount when we look at the total bill that arrives at the doorstep of every household promptly at the start of each month. It is also true that in a situation where there is a major gas shortage in the country, there is a higher usage of electricity for domestic purposes, with people using it to warm water and in some cases provide heating, when there's no other choice.

It is also true that this is yet another case of the PTI government blaming the decisions it is taking on its predecessor. While this was possibly acceptable for its first two years in power or a little less than that, the fact that it is continuing beyond two and a half years raises some doubts. By now, a competent government should have been able to put things right and find a way to make electricity cheaper for people by preventing theft of power from lines by improving the power infrastructure and where necessary by dividing up how prices were calculated for industry and for domestic use. While this has been done at various points, the continuing rise in power and the fact that subsidy cannot be given will be a major blow for most households. It is also true that the IMF discourages subsidies and the lack of subsidy on gas is one outcome of the deal with the IMF which the PTI government signed at the beginning of its tenure. The result is coming out in many sectors and people will not go into details as to past mistakes but blame this increase on an incompetent government which is not able to manage the situation.



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