ALREADY frustrated with the rapidly rising cost of living that is the result of runaway inflation, residential electricity consumers are outraged at their puffed-up power bills. The latter are the outcome of the country’s largest-ever fuel price adjustment charges and the size of the various taxes being collected by the government on them. Thus, it is not surprising to see thousands of people take to the streets to protest against their rapidly rising bills, which have compounded the financial toll on inflation-stricken low-middle-income population groups. The government has responded by waiving fuel adjustment charges for ‘protected’ consumers using up to 200 units per month to appease a justifiably angry public.

The consumers have been hit hard by the spike in their bills in recent months, with the average electricity cost more than doubling for low- to middle-class households since May and many families finding it difficult to pay their bills. With the steep rise in fuel price adjustment charges, the burden of government taxes in the electricity bills has also increased significantly. The government is blaming the higher fuel price adjustment charges on June’s elevated international energy rates. But that is not the only reason. The almost 50pc enhancement in the base tariff that it committed to the IMF that it will implement from July through October is another factor for the swollen bills being delivered to the consumers, who are already struggling to make ends meet in the face of soaring prices of food and fuel, eroding real wages, and rapidly declining purchasing power. The bad news is that electricity prices in the country will continue to climb even after a downturn in international fuel prices as long as there is no move to undertake long-standing power sector reforms in order to sharply cut system losses, control the allegedly rampant corruption in the distribution companies, stop widespread power theft by the powerful, and, more importantly, reduce reliance on imported fuels by shifting to local fuels for generation and encouraging renewable energy.

Published in Dawn, August 25th, 2022