Roshan Pakistan: at what cost?

As Pakistan struggles to survive in a scorching summer in the grip of relentless load shedding, which runs up to 12-20 hours in some urban and rural areas, the latest announcement of the federal government to increase the electricity tariff has been met with incredulity, followed by outrage. A country already staggering under the effects of an almost decade-long energy crisis, which has resulted in the minimising of commercial and industrial output to a great extent, means the tariff increase is tantamount to pushing it into more hardship. The 25 to 98.24 percent increase in the tariff for industrial and commercial consumers is aimed at the generation of Rs 137 billion during the current financial year through a two-phase tariff ‘rationalisation’ plan. The electricity subsidy (one unit costing Rs 14 to produce is given to the consumer at Rs 9) inflicts a huge burden on the treasury, and now the decision to withdraw the subsidy virtually in one go has been announced. The present subsidy of Rs 396 billion will be reduced to Rs 252 billion, thus increasing the revenue generated by all distribution companies to Rs 1 trillion from the existing Rs 875 billion. Further, effective October 1, the tariff for domestic and agricultural consumers will be increased by an astronomical 117 percent. The earlier plan to increase the electricity rates incrementally has apparently been brushed aside to make way for a strategy that may give a short-term boost to the finances of the power sector but its long-term negative impact is too huge to be ignored. The Rs 500 billion circular debt, said to be the main cause of the electricity shortfall, has been cleared to the tune of Rs 480 billion to various IPPs, but as there has been no let-up in the intensity of load shedding even in the month of Ramzan, many questions have been raised. The allegation of cronyism to pay certain IPPs out of turn, or relegating others to lesser payments has surfaced. In consideration of the economic suffering of the majority of people, who have been forced for years to exist on a personal and professional level on a very limited supply of electricity, incurring tremendous costs of generating their own power, the present decision must be reconsidered very carefully. The incomes of all classes of people have suffered a steady setback — which continues to date — and any increase in electricity tariff would be devastating. The urgency with which the present government wishes to fulfil its promise of a ‘Roshan’ (Bright) Pakistan does not take into account the fallout. Pakistan wants to be rid of the menace of load shedding, but that in no way means most Pakistanis want to be in a position where the cost is so high that they would rather live in darkness than suffer further crippling financial burdens.