Fresh power tariff hike to affect consumers

Govt must not succumb to donors' pressure: Experts

14 February 2014 Kazi Zahidul Hasan

Economists and industry leaders on Thursday protested the government's ongoing move to hike power tariff afresh saying that it would adversely affect the manufacturing and agro sector ultimately intensifying plights of the consumers.They said that the government was frequently raising price of the electricity both at the retail and wholesale levels only to follow prescription of donor agencies, which is against the interest of the people as well as the industry. While talking to The New Nation, they alleged that the government has taken the move to give benefit to a 'vested quarter' involved in commission trade from rental and quick rental power plants and to cover up inefficiency and corruption of the distribution companies at the cost of consumers.Official sources said, electricity tariff for retail customers could go up next month as part of the government's move to rationalise the price for cutting subsidies. It might be raised on the basis of proposals from the distributors to the energy regulator in December 2012. The utility companies have proposed a hike between 9 and 12 per cent.  The government hiked the power price six times in its previous tenure.  "The government's power tariff hike time and again did not yield any positive result on the economy it rather brought strain on various macroeconomic fronts, Professor Abu Ahmed, a noted economist, told The New Nation yesterday.He said: Like previous occasions, if the tariff hike plan is translated, it will have some adverse effect on industrial operation and agricultural production. It will also push up prices of goods and commodities affecting livelihood of fixed income group consumers.In my mind, Professor Abu Ahmed said, the government is trying to settle the issue ad-hoc basis by raising power tariff at regular interval. It is a move to adjust high cost of power that purchased from the private sector's power plants. "As frequent tariff hike is putting burden on the national economy, the government should opt for building cost effective combine cycle mega power plants in public sector abandoning power purchase from costly rental and quick rental power plants," he suggested.Besides, steps should be taken to reduce corruption in the power sector and improve efficiency of the distribution companies to supply electricity at lower rate to the end users. Prof Abu Ahmed also stressed the need for overhauling or repairing the country's existing public sector power plants to make a bridge between supply and demand. "It will not only boost their generation capacity but also reduce the government's dependency on the rental power plants," he noted.   Commenting on the issue, Dr Mirza Azizul Islam, former adviser of the caretaker government said, this was inevitable as the government has limited option. The government is compelled to take the decision as it went for high cost of energy sources to overcome power shortage on urgent basis," he added. He opined that it would have negative impact both industry and consumers level because it would push up production cost. "The poor and marginal farmers would also be affected by the power price hike," he added.Disturbed by the proposed hike, trade bodies also urged the energy regulator not to allow any hike in power tariff saying it will badly affect the state on industry.  "The move of fresh power tariff hike by the distribution companies is demoralizing the industry. Any increase in power tariff would raise input cost of the industry," said Abdus Salam Murshedy, President of Exporters Association (EAB).    

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