Thursday, May 17, 2012
Daily Times Editorial May 18, 2012
Raising tariff for ‘absent’ electricity While load shedding of anywhere from 10 (official) to 23 (empirical) hours a day continues unabated, the government in its infinite wisdom has chosen to sprinkle salt on the public’s wounds by raising the electricity tariff by 16 percent. The raise will yield an extra Rs 88 billion, which the government hopes to set aside for relieving the circular debt impasse that has prevented installed capacity from being utilised fully, producing a power deficit of 4,000 (official) to 5,200 (independent estimates) MW. But why quibble about the number of hours people are subjected to power cuts, especially with summer looming and the temperature finally rising after a false extended spring into the middle of May. Or, for that matter, whether the shortfall is 4,000 or 5,200 MW. In either of these cases, the end result is the same. People are not just uncomfortable, work has been badly affected, if not ground to a halt throughout the country. One shudders at what lies ahead when the full blast of summer is finally upon us. Already irate tempers will explode, if that does not happen even earlier. While the raised tariff will go some way towards retiring the circular debt (estimated to be around Rs 400 billion by now), one, it will not prove the final solution to the problem; two, it will raise people’s ire even further at a tariff rise for ‘absent’ electricity. Since the raise cuts across domestic, commercial, industrial and agricultural consumers, the inflationary impact can only be imagined. So what the government gains with one hand on the swings (tariff raise), it loses on the other on the merry-go-rounds (increased inflationary pressure). In the light of the anticipated negative reaction of the public to this latest burden to be inflicted on them without any sign of relief in load shedding, it is interesting to see in the media reports about the cabinet meeting in which almost all the ministers were so irritated by the fact that they were in no position to face the electorate in their constituencies because of load shedding, and the fear that the opposition was going to town on the issue, that they put both the finance and water and power ministers on the mat. Their fear was that come the next elections, they would have to bear the loss of their constituencies because of the absence of electricity (it may be noted in passing that whatever the government has or has not achieved in the last four years has by now been wiped out by the generalised anger at the government’s inept handling of the electricity issue). Such was the intensity of their grilling that the prime minister was forced to forego the scheduled agenda in favour of a full discussion on the electricity crisis. Certain ‘Platos’ even went so far as to suggest that the government should prevent any negative fallout of the electricity shortage amongst the electorate by printing as much money as was required for wiping out the circular debt and ensuring the supply of electricity. This ‘wisdom’ was shot down unceremoniously by the finance minister. Peeved by the unremitting attacks on his ministry’s handling of the crisis, the finance minister, Hafeez Sheikh, is reported to have snapped that it is easier to talk about things than understand them. The mutual ire of cabinet colleagues at each other will prove nothing in comparison with the storm of anger and protest that awaits the government as the summer advances and electricity ‘retreats’ (demand is bound to rise with temperatures). Even the control room reportedly set up in the presidency to monitor the load shedding may prove unable to make a dent in the situation. Similar remarks apply to the Rs 3 billion released to the water and power ministry for payments to PSO to ensure additional supply of furnace oil to the power producers. Another Rs 7 billion has been requested, but with the finance minister pointing to the straitened financial and economic circumstances of the country, there is no guarantee that extra amount will be available soon. The incumbents are staring down the barrel of a shotgun in electoral terms if they fail to salvage the country from ever rising costs of utilities and everything else in the midst of unrelieved heat and darkness.