THE exhaustive news briefing of Power Minister Sardar Awais Ahmad Khan Leghari on Sunday confirmed the widely-held belief that the so-called reforms in the power sector are an eye-wash as they miserably failed to improve performance and profitability and were based only on the strategy of burdening the common man while protecting inefficiency and rampant corruption. The Minister tried in vain to paint a rosy picture and could not ward off genuine complaints and grievances of all categories of consumers vis-à-vis quality of service and the region’s highest tariff despite election pledges to provide free of cost electricity to the ordinary citizen.
The Minister rejected reports suggesting that electricity subsidies for protected consumers were being withdrawn, describing such claims as inaccurate and misleading. His remarks came against the backdrop of reports last month that Pakistan had committed to the International Monetary Fund (IMF) to gradually end untargeted electricity subsidies for residential consumers and provide future support through the Benazir Income Support Programme (BISP) as part of conditions attached to a $1.2 billion climate support loan. The denial is questionable as the Government is proceeding ahead with its plan of collecting data of consumers through the QR code-based system. Mr. Leghari talked about continuation of the subsidy for ‘eligible’ consumers but did not explain what the eligibility criteria are. There are, however, reports that the Government will cross-check the information being provided by consumers against BISP data-base and discontinue subsidy for those not listed in the programme, which means a steep rise in electricity tariff for those who sacrifice their comfort to consume less than 200 units a month to remain eligible for lower rates. The Government is also aiming to hunt down those who have installed more than one electricity meter at a premises on the premise that these meters are aimed at dividing consumption to remain in the protected category. The fact remains that more than one meter is not luxury but a necessity in view of divided families and rented accommodation. As pointed out by the Minister, the volume of electricity subsidies had increased from Rs199 billion to Rs423 billion, while total subsidies worth Rs527 billion were being provided to the agricultural and domestic sectors and the objective is to bring down both the number of subsidized consumers and the amount so incurred. However, the Government must keep in mind that the number increased due to various factors related directly to the punitive and regressive tariff system. More and more consumers are switching to solar and if the Government persisted with its existing slab-based tariff system and failed to reduce the electricity prices, consumers will be pushed en masse towards the off-grid solar option. The Power Minister also referred to the saving of Rs. 3.5 trillion due to revision of agreements with Independent Power Producers and a reduction in losses by power distribution companies. The Government surely lowered the tariff marginally but the positive impact of the decision was nullified by imposition of fixed charges on all categories of consumers. Strangely enough, the authorities concerned never get tired of making claims of providing subsidies to those consuming less than 200 units but they fail to mention the money collected through a multitude of taxes on the electricity bill as well as fixed charges, an amount that is much more than the subsidy the Government provides to protected categories. Transparency demands let there be no taxes, no fixed charges and no subsidy. Similarly, if the Government goes ahead with its plans to abolish subsidies for all those except BISP beneficiaries, then logically there is no justification for continuation of the slab system. There should be single slab and single rate irrespective of consumption as this will also encourage more consumption in the backdrop of surplus generation capacity.
