The decision of federal cabinet on Saturday to massively increase the base tariff of electricity up to Rs 7.50 per unit is going to add to worries of the households already grappling with rising cost of living. For power consumers, this increase will further strain their budgets, forcing them to make difficult choices, sacrificing essentials in order to keep lights on.
We understand that this would not have been an easy decision for a government that is left with just few days in office, as this decision will extract its political cost. Though aim is to cover line losses and address the issue of circular debt yet a question remains that should this burden fall solely on shoulders of consumers who have consistently been paying their bills on time? One of the unintended consequences of such tariff hikes is potential increase in energy theft and adoption of unfair means to evade higher bills. With increasing cost of electricity, consumers who are already struggling financially may resort to illegal connections or tampering with their meters to avoid paying elevated rates. This will not only exacerbate the issue of line losses but also lead to further revenue losses for power distribution companies.
The impact of tariff hike on consumers extends beyond individual households. Industries and businesses, already faced with various challenges, may face additional hardships due to rising electricity costs. The increased cost of production could lead to inflationary pressures and make locally produced goods less competitive in global market. Small and medium-sized enterprises (SMEs) might struggle to stay afloat, leading to potential job losses and economic instability. Reforms in power sector are need of the hour. Rather than burdening consumers, government should explore alternative and sustainable solutions to address the issue of line losses and circular debt. Improved infrastructure, upgraded transmission and distribution systems, and stricter measures against electricity theft can contribute to serious reduction in line losses. Additionally, adopting renewable energy sources and promoting energy conservation initiatives can help curb the demand for conventional electricity and reduce overall costs.
