Dawn Editorial on Exorbitant Elecrticity Prices in Pakistan
Via Dawn newspaper.
Unsuspecting electricity consumers are being charged around 35 per cent more than what they were paying before the government raised the power prices by six per cent in October last year.
The cumulative increase in the power bills is estimated to come to more than 50 per cent in the bills for January. The charges for the current month will incorporate a further 12 per cent increase in the price of electricity.
The tariffs have been raised as part of the phasing out of the massive energy subsidies under the $11.3bn standby deal with the IMF. The exorbitant increase in the consumer bills is not due only to the elimination of subsidies.
A report in this newspaper informs us that the consumers are also being charged excessively due to a government decision to pass on the rise in international oil prices to them. In the bills these charges appear under the head of “fuel adjustment charges”.
On top of that, the consumers are paying the government almost 22 per cent tax in accordance with the power they consume. This is something that the government has tried to conceal from the public for fear of the political fallout.
Perhaps it didn’t take into account the loss of face it has suffered now that this sleight of hand has been discovered. Subsidies are bad for the economy because these create unwanted and unnecessary distortions without benefiting those for whom they are meant to help, and are a major source of budgetary problems for the government.
There are no two views on purging the economy of this needless expenditure on subsidies. But bad governance and concealment are worse. An increase of more than 50 per cent in power bills in a span of four months is unacceptable.
It has and will make middle-class consumers cut essential expenditure on food, health and education to pay energy bills. The government can help alleviate the pain of consumers by cutting indirect taxes on their bills. It must sometimes show the people that it is committed to providing them relief — or brace itself for an angry public reaction.
