Electricity price hiked yet again

The Ministry of Power, Energy and Mineral Resources in a circular on Tuesday announced the rise in electricity price by five per cent at the retail level dealing yet another blow to consumers. People are already struggling to cope with the electricity prices hiked twice in January. After two hikes in the prices of electricity in only 20 days the increase this time is going to put people’s life into disarray.

Last December the government amended the Bangladesh Energy Regulatory Commission (BERC) act to decide upon power price by avoiding public hearings that used to be held by the BERC before each hike. After the amendment, the government has had a free rein to fix the price of power itself. Energy experts and economists think that the decision came in line with the prescription of the International Monetary Fund to get a loan of $4.7 billion from the IMF that set the condition for reducing subsidies in the energy sector.

The decision to raise the price came into effect yesterday. As per the gazette notification, the price of each unit of electricity will rise to Tk8.25 from the previous Tk7.86. After the decision, consumer rights bodies accused the government of exploiting and robbing people in the name of staving off the dollar crisis. They said the government has had to give subsidies to the sector because of flawed power and energy policy and widespread corruption in the sector.

According to them, frequent hikes in the prices of electricity will make life more miserable. In the 2021-22 financial year, the government had to count a total subsidy of Tk12, 000 crores in the power sector alone. This time the government will have to pay a subsidy of Tk17, 000 crores, according to the November financial analysis of the Finance Ministry.

In barely two months the increase in the price of electricity for the third time has put the government policy on the power sector in question. The Consumers Association of Bangladesh (CAB) and energy experts have gone on record saying that the government had to increase the prices of electricity because of a vested quarter whose inefficiency and corruption are squarely to blame for such huge subsidies the government has to pay every year.

In 2019 the CAB said the government could save Tk10, 549 crores in the power sector if it could stop corruption. If the estimation of the CAB is even close to the truth then such a staggering subsidy might be avoided easily. It is high time the government realized how a section of people in this sector is making money thwarting what the government has achieved so far.

If this unbridled corruption and inefficiency reign supreme in the energy and power sector then the burden of subsidy will continue to force the government to put aside a fat amount of subsidy for the sector. If it goes on like that then it is the government that has to take responsibility for a handful of corrupt people who will ultimately put the sector in a precarious state.

Price hike of electricity is not the ultimate solution to the problem the government is facing. Rather if corruption can be eradicated from the sector and corrupt people can be punished and inefficient people can be removed only then the government can avoid increasing power prices frequently.