Power dysfunctions.
THREE separate issues are now doggedly evading resolution in the power sector, and if left to fester, they can potentially lead the way to a crisis. The first is the question of an impending tariff hike which the government has now grown wary of passing through, given the enormous pressures that the inflationary spiral of the previous year has placed upon the people. The second is the promise Prime Minister Imran Khan made last year to exporters that they would receive electricity at the rate of Rs7.5 per unit, which is heavily subsidised with the average rate being Rs15 or so in the rest of the system. His government is uncertain about how this is to be delivered considering that neither the power nor finance division is ready to foot the resultant bill, which could be as large as Rs60bn. At the moment, the Economic Coordination Committee is dithering over ways and means to deliver on this pledge, while Mr Khan himself is said to be demanding a decision. The third issue involves a power tariff hike of almost Rs5 per unit on the average tariff for residents of Karachi, whose electricity the government has been subsidising for a number of years now in the interest of maintaining uniform rates across the country. There is visible fatigue with the subsidies involved, but nobody in government can muster up the will to pass this through in one go.
The government is now struggling with itself over how to crack these three issues. On Wednesday...
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