Editorial
Power tariff issue
The quantum jump should have been avoided
THE Bangladesh Energy Regulatory Commission (BERC) was either unaware of the market mechanisms or credits the public with very little intelligence when it asserted that the increased hike in the price of power would be applicable to only the bulk buyers and not to the retail rate for the consumers.
Even a layman would not fail to see that the increased cost would eventually be passed on to the consumers. This is borne out by the fact that hardly had the hike been announced when the major power distribution companies decided to apply to the commission to allow them to raise the price of electricity at the retail level too. It is only but natural for the distributors to pass on the extra cost to the consumers, and to hope, as the BERC chairman has been so wishful in hoping, for them to do otherwise, behooves only those living in an unreal world
The statement that the distribution companies would be required to apply formally to the BERC for increasing the retail tariff brings no comfort to us either. We are constrained to say that the BERC has taken us for a ride in thinking that the public will be assuaged by his comments, which is not related to economics, and far removed from reality.
We would like to ask whether the commission had gone into the consequences of the 16 percent price hike of electricity except for a public hearing which had actually brought out the deleterious consequences of such a move, if only in passing. After all, given the more than 30 percent increase in fuel prices recently, that has had the most severe repercussion on the economic condition of the middle and lower income groups, one doesn't have to be an economist to predict the likely ill-effects of the rise in power price on industrial production and prices of essential goods.
One also wonders whether the commission had carefully considered all those factors that fuel the increase in cost of power. There is the issue of arrear bills that account for the cash flow deficit of the PDB. We wonder whether the commission sees any role for it in this regard. Are the people to continuously yield to the demand for rise in tariff because of the mismanagement and shortcomings of the PDB? We understand that one of the major defaulters happen to be the government agencies.
We wonder whether the issue of system loss has been addressed by the commission in right earnest, and whether it has a role to play in reducing losses of the power board by insisting on their reducing overhead expenditures.
The hike in power price comes at the very wrong time. We suggest that the commission reconsider its decision keeping in view the economic crunch that the country is facing, and resist all pressures to raise power rate at the retailers' end.
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