Power tariff hike opposed en masse

The Daily Star Online Report July 16, 2012

Consumers’ rights groups and left-leaning political parties on Monday strongly opposed the government’s plan to increase the bulk power tariffs, which will ultimately prompt the authorities to raise the retail prices.

They also urged the government to look out for other revenues instead of increasing the power tariff as ordinary people are already cornered due to rise in electricity bills in recent times.

They made the observation at a public hearing on the Power Development Board’s (PDB) proposal to raise bulk tariff by 50 percent at the Bangladesh Regulatory Energy Commission (BERC) in the city.

Last month, the state-run agency sent a proposal to the energy regulator for increasing bulk power prices by 50 percent on average.

The PDB suggested increasing the bulk rate to Tk 6.03 a unit (a kilowatt-hour) from present Tk 4.02 to minimise its reliance on subsidies to buy power from oil-fired rental plants.

BERC has already received proposals for at least 50 percent increase in retail electricity tariffs from all state-run power distribution companies.

The rise in retail tariff always follows the increase in tariff for the bulk buyers, which are five distributors in the country.

Prof Dr M Shamsul Alam, energy adviser of the Consumers’ Association of Bangladesh, said the 7.5 percent rise in bulk rates four months contributed to sharp rise in retail rates.

“An increase of Tk 0.28 per unit for bulk users has contributed to increasing electricity bills by Tk 1,000 to Tk 3,000 for individual users. We are scared because we do not know how much the energy bills will go up if the bulk rates go up by Tk 2.01 per unit,” he said.

He urged the BERC to postpone the current procedure aimed at increasing power tariff.

Alam said many consumers have already switched off their lights and fans due to the latest inflated power tariff. “We have to keep this in mind.”

Ruhin Hossain Prince, a member of central committee of Communist Party of Bangladesh, said the proposed hike would fuel inflation further and increase the prices of products manufactured with electricity.

He said before raising the prices the PDB should find out whether ordinary people have the capacity to buy power with additional prices.

Prince also urged the government to look for alternatives to help the country come out of the electricity crisis.

He said the PDB and many government officials always shows logic in favour of increasing electricity prices saying that the tariffs in Bangladesh is one of the lowest in the region.

“But they do not say that our per capita income is also one of the lowest in the region,” he said.

Ragib Ahsan Munna, a member of central committee of Workers Party, the government should take into consideration the purchasing capacity of the general citizen before increasing electricity tariffs.

Shah Moshfiqur Rahman, a college lecturer hailing from Gaibandha, representing a consumers’ rights group warned the government that there would be public outrage the way the electricity tariff is going up.

A technical committee of BERC on Monday also recommended the bulk tariff raise by 21.89 percent or Tk 0.88 per unit, but Salim Mahmud, a member of BERC, said it is not mandatory for the commission to oblige its own report.

Mizanur Rahman, director, systems and planning of PDB, said if the BERC does not increase the power tariff as proposed by PDB then the deficit would reach Tk 12,500 crore in the current fiscal year.

The deficit will still stand at Tk 3,700 crore even if the bulk tariff is increased in line with the PDB proposal, he said in his presentation.

The regulator will soon hold another public hearing for discussing proposals to raise retail prices. BERC plans to raise tariffs for both bulk and retail users by this month, said an official earlier.

The government last hiked both bulk and retail power prices four months ago.

Power tariff for bulk clients was last increased in March by 7.49 percent to Tk 4.02 a unit from Tk 3.74 and for retail users by 6.25 percent to Tk 5.32 a unit from Tk 5.02.

Berc Chairman Syed Yusuf Hossain presided over the hearing.