Power price hike.
ALREADY struggling to cope with the impact of the Covid-19 pandemic and rising food prices, consumers received yet another rude shock when the government increased the unified base power tariff of distribution companies by a whopping 15pc. Even though the government had been dropping hints about hiking the tariff ever since it resumed talks with the IMF for the revival of the suspended $6bn loan deal, low-middle-income consumers have reeled from the announcement. Another electricity tariff increase is expected in April. The across-the-board electricity price hike of Rs1.95 per unit, which is estimated to put an additional burden of Rs200bn on consumers, will likely help the government pay the growing compulsory capacity payments - the fixed costs of the power producers - and is expected to slow down the circular debt.
However, rather than owning the decision, the ruling PTI has put the entire blame for the tariff increase on the previous PML-N administration. Indeed, the latter is largely responsible for ordering excessive and expensive new generation on the basis of an exaggerated forecast regarding electricity consumption and without cleaning up the mess in the power sector. But that doesn't absolve the PTI administration of its own failure to fix the power sector in the last two and a half years. Its predecessor may have left 'landmines' for it as PTI ministers claim. But what stopped it from clearing those landmines instead of blowing them up in the face of the people? The government owes an explanation to consumers who have been asked to foot...
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