The government’s recent decision to implement another increase in power tariffs as the year comes to a close highlights the persistent challenges in resolving power theft and circular debt issues. The latest rise of Rs1.15 per unit adds to a series of recent escalations in electricity and gas prices, justified by the government as essential for tackling the circular debt problem but rendering utilities unaffordable for a significant portion of the population.
There is a pressing need for price stability. Instead of experiencing consistent rates for a quarter or even a couple of months, we are witnessing frequent hikes every few weeks, driven by various factors. Despite ostensibly being ‘variable,’ power prices predominantly move in a single direction due to the ongoing debt crisis.
If regulators are unwilling to pass on savings from lower input costs, the least they can do is reduce the frequency of price hikes, granting consumers a few months respite from concerns about additional increases. The National Electric Power Regulatory Authority, distribution companies, bureaucrats, and politicians all share responsibility for the mismanagement that has led to this situation.
An illustrative example is the collection of “positive quarterly adjustments of Rs22.297 billion” from K-Electric consumers, attributed to variations in areas like line losses, higher management costs, and other expenses.
While many of these costs stem from inefficiencies resulting from poor management and other issues attributable to the government and companies, the approach taken involves burdening honest consumers to cover wasteful expenses rather than addressing and rectifying systemic problems in company structures.
It is acknowledged that increasing revenue and reducing line losses are necessary, but a more effective strategy would involve addressing the longstanding systemic issues that have allowed mismanagement and inefficiency to persist without facing corrective pressure for decades.
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