Power tariff hike to affect consumers

Sufferings of the common people, who are already facing financial hardships, will increase due to fresh power tariff hike, consumer rights groups and economists say. They say that apart from hitting the common people hard, especially the low- and middle-income groups, the latest power price hike will have a negative impact on the country’s overall economy.

“The power tariff hike will have a spill-over effect on the country’s financial sector from the grass roots to the central, when we people have already experienced skyrocketing of prices of various essentials including rice, pulses, vegetables,” said an economist. Apart from these, it will also cast an adverse impact on the production of industries, factories and agriculture.

The production cost in the readymade garment sector will go up. Besides, the entire export sector will face further pressure in the global market competition. Another expert said, when the government failed to arrest the soaring price of essentials, the latest price hike will add salt to the wounds of the low and mid income people.

Earlier on Thursday, Bangladesh Energy Regulatory Commission (Berc) increased the power tariff on a weighted average by 5.3 percent at retail level and 8.4 percent at wholesale level. The new tariff will come into effect on March 1, said newly-appointed Berc Chairman Md Abdul Jalil while announcing the decision on Thursday at the Commission’s auditorium.

The retail power tariff has been increased from Tk 6.77 to Tk 7.13 per unit (each kilowatt-hour) and Tk 4.77 to Tk 5.17 at the wholesale level. The Berc also raised the wheeling charge in power transmission by a weighted average of 5.3 percent to Tk 0.29 per kilowatt hour to Tk 0.27.

On the other hand, Dhaka Water Supply and Sewerage Authority has also proposed to increase the price of water from Tk 11.57 to Tk 20 per unit at the residential level while from Tk 37.04 to Tk 65 at the commercial level (overall up to 80 percent), which is totally unreasonable and unacceptable.

The price of electricity has gone up again both in retail and wholesale levels, which has already created panic among the mass people as they are saying gradually water, gas and electricity high traffic will hinder their daily life. People of all walks of life have protested the price hike of electricity. But despite their protest, the high price will increase prices of essentials, and consumers have to count extra money every day.

Responsible people of different organizations have responded to the increase in electricity prices. Consumers Association of Bangladesh (CAB) energy adviser Prof Shamsul Alam told the media, “This decision is absolutely unreasonable. At the moment there was no need to raise electricity prices”.

“We have opposed it from the beginning. Now people will be under tremendous pressure. This will have a negative impact on all areas of life. The government should reconsider the decision,” he added. Economists say, it is important not to raise electricity prices, but to take it to a logical level. They urged to increase the capacity of the government power plants.

Industrial economist, Dr Khondaker Golam Moazzem who is also a research director at Centre for Policy Dialogue (CPD), told Bangladesh Post, “After announcing this year’s budget, the government increased per unit electricity price both in retail and wholesale level. If the government coordinated the capacity that is actually required, and set up a combined power industry, price would remain in the general people’s capacity”.

“Due to government officials’ inefficiency, a big amount of money for capacity charge rent is going to quick rental organizations. However, the government should stress on combined power generation, rather than depending on quick rental capacity”, country’s leading economist Professor Abu Ahmed told Bangladesh Post on Thursday.

“The government should encourage power production at low cost, this will minimize the price and bring relief to the people,” he added. Industry owners also fear that such a decision will increase production costs too.

BGMEA President Rubana Haque told the media, “In the last four years, our production costs have increased by 25.5 percent. On the other hand, product prices have dropped in the international market. Therefore, it is not advisable to increase power costs. Raising electricity prices would be detrimental to the industry.”