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Wednesday | 15 January 2025 | Epaper

Electricity price: Economy will see inflationary pressure

Published : Wednesday, 4 October, 2017 at 12:00 AM  Count : 441
Haradhan Ganguly
[By hitting retail consumers in the markets from demand side, industrial sectors like garments, textile, re-rolling, pharmaceuticals, leather and all other small and medium industries and exports, what fruits people will get in short and long run at power price hike in phases, it is far to realize.]

We had not forgotten the experience of electricity during BNP regime. Only putting "Khamba" did not prove success of taking electricity to the door steps of majority people. Rhetoric could not stand against reality.
However, current government has achieved remarkably much in solving electricity crisis. Distribution of electricity is getting wider, widespread distribution of electricity is enabling the remote villagers to be accustomed to maintaining electronic goods and appliances and enjoying televisions.
As far its production and transmission process is concerned, ample scope of debates are rising in the total way of production, transmission and distribution pattern where things like economic costing and its synergy effects are coming first in decision taking.
Firstly debate concentrates on cost of production of electricity taking into account of state owned and private sector production cost and prevailing discrimination. To cover up rising production and maintenance cost, it has become customary for Bangladesh Power Development Board (BPDB) to cite losses due to increased use of furnace oil and diesel both of which are bought by the utility company Bangladesh Petroleum Corporation (BPC) at prices higher than what the private sector power-generating companies pay for.
Then why should consumers have to pay for these added costs? Why are not policies changed to give relief to consumers? Why would the economy face inflationary pressure due to repeated price hike of power?
The latest "pious" venture of the BPDP is a massive hike in bulk rate of power by 14.78 per cent to Tk 5.59 per Kilowatt-hour unit from the present rate of Tk4.87 which, in effect, will trickle down to retail consumers ultimately.
Understandably, it has drawn the ire of consumer groups and businesses alike. The issues of price hike and other related questions have also been raised at the public hearings at Bangladesh Energy Regulatory Commission (BERC). But all have gone in vain. We do not see any concrete steps being taken to raise the efficiency levels of the state-owned plants nor have we seen any intention by authority concerned to move away from generating electricity by using cost-intensive plants that use imported liquid fuels.
Businesses organizations are looking to this price hike of electricity as a shock wave to industry as it is done just after 3 months the authority has raised the price of gas. This will cause the close of lac of industries with lac of labours unemployed.
It is a part of conspiracy of a section against industrialization, they opine. We will not go to that extent. But we support experts' views. Government authorizes to build up plants at the cost of unnecessary thousand crores of taka.
To adjust this wastages authority concerned are off and on taking resort to hiking price of power. Corrupt elements are getting upper hands in authorizing to set up their liking coal fired power plants at the cost of higher prices. Projects of Tk 10 crores were discarded. Instead project expenditures were raised up to Tk 30 crore.
It was done to incur corrupt dividends. As a result authority concerned is compelled to buy per unit of electricity at price Tk 8 to Tk 15. Though production cost is Tk 5 per unit. Thus consumers are becoming victim of artificial price rise by counting prices for corruption and other inefficiency and this is happening in every six months.Legal customers are being deprived of getting electricity and gas connections in the face of expanded illegal connection. Nearly, 3 thousand industries are closed down due to price hike of gas in captive power stations.
Experts view, where only 5 per cent rise works as a heavy blow to existing industries, 15 per cent enhancement is sufficient to ruin them to ground. Textile sectors will be more hard hit. State Minister for power and electricity, Nasrul Hamid himself told to press, more than 2 thousand 5 hundred industries are lacking gas connection still now.
So we fail to realize the rationale behind price hike of electricity at the tune of 15 per cent now. Gas price was raised again in 3 months back. Experts' view, unnecessary costing is being added that induces price to go up. We are fearing that this power price rise will not only crunch productive industrial sector investment, it will bring a heavy toll on agriculture sector.
Cold storage expenditure will be sky rocketing. Its synergy effect on markets will be manifold going against consumers' interests. It will lessen the competitiveness of exports. Why and for whose intrigues government is axing its legs before election by inviting inflationary pressure in the economy.
By hitting retail consumers in the markets from demand side, industrial sectors like garments, textile, re-rolling, pharmaceuticals, leather and all other small and medium industries and exports, what fruits people will get in short and long run at power price hike in phases, it is far to realize.
But it is hard to believe that costs will reduce with such monopolistic ideas dictating energy policy in the country where making unheard of profits by publicly-owned companies at the expense of consumers is an accepted norm. It is not clear to what extent BERC will accept arguments put forth by BPDB and other entities for price hike, but we must accept that prices will keep going up periodically until we are willing to take some tough decisions on how we generate power. But consumers are not ready to bear further inflationary pressure in their livelihood.

The writer is a freelance contributor










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