Don't burden citizens with higher power tariffs

The Bangladesh Energy Regulatory Commission (BERC)'s decision to increase power prices by 16.7 percent on average, amid a persistently high inflation, comes across as unempathetic towards consumers, given that the underlying inefficiencies in the power sector remain unaddressed. What makes this raise, effective from June, even more shocking is the BERC chairman’s admission that the impact of this move has not been assessed, and that the only factors considered were power generation, procurement and import costs, transmission and distribution expenses, and government subsidies provided to the Bangladesh Power Development Board (BPDB). In other words, consumers, who have been grappling with an average inflation of nine percent for the last three years, had little voice in BERC's decision.

In fact, even residential consumers who use only a fan and a light—lifeline users consuming up to 50 units of electricity a month—will see a 14.9 percent increase in their electricity bills in July. Thankfully, the BPDB has requested to cancel raising the tariff for lifeline users and those consuming up to 75 units of electricity. We hope BERC will consider this request and do the needful. However, the increase will not be easy for the crores of consumers who will see their electricity bills soar, particularly as the price hike comes in the midst of summer, when the sweltering heat makes it impossible to do without a fan or other cooling appliances.

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Nevertheless, the group that will be hit the hardest is farmers. Already reeling from high fertiliser prices, farmers will now face higher irrigation costs. Coupled with the increasing risks of climate-change-induced natural calamities, these added burdens could make farming less viable and contribute to further increases in food prices. Production costs across sectors will likely rise as well, further driving up inflation.

Why is the government supporting this power tariff hike, especially when the power, energy and mineral resources minister said it would not be increased for at least two years? While it is understandable that the situation has become difficult for the BNP government after the US-Iran war pushed up fuel import prices, raising the tariffs for end users cannot be the only solution. Back in February, the government said it was taking measures to renegotiate the problematic power contracts signed during the Awami League regime—one-sided deals that have been draining the national coffers, even at times when no electricity is generated. Three months later, the progress of those measures remains unknown. Even a major push towards renewables is not yet visible, which would reduce our dependency on fossil fuels.

Ironically, there is little evidence that raising power tariffs would reduce government subsidies or BPDB's financial losses. Then why add this burden on consumers? We hope that the BNP government will honour the large mandate it received from the people and make pro-people choices by revisiting BERC’s decision.