At a time when the government needs to help people in their daily struggle to survive in these days of unprecedented price hikes of almost all daily necessities, it is really shocking that the Bangladesh Energy Regulatory Commission (BERC) has proposed a whopping 58 percent bulk electricity price.
This news has already drawn huge flak from a cross section of people. If this proposed price is made effective, the Bangladesh Power Development Board (BPDB) that buys electricity from power plants will sell 1 kWh of electricity to the distributors for Tk 8.16, up from the present Tk 5.17. What will be the fallout of this new tariff?
First of all, the electricity cost of each household is already grappling to make ends meet in this economically volatile situation against the backdrop of Covid-19 pandemic and the Ukraine war. A household that now pays Tk 1000 for electricity in a month will have to pay Tk 1600.
Secondly, the increased power tariff will directly hit life as prices of all commodities will inevitably increase that have already gone beyond control. The power tariff decision will undoubtedly raise the cost of industrial production. The production cost of industries with captive power plants will also increase significantly and the businesses will become uncompetitive.
But why does BPDB want to raise the electricity price in the first place? As the reason for the hike it mentioned that electricity generation cost increased in the last fiscal as plants had to use costly furnace oil instead of the cheaper gas. BPDB also said that it had a deficit of Tk 30,251 crore in its annual budget because of the withdrawal of 6 percent tax relief on furnace oil, imposition of new VAT and taxes on fuel, and 5 percent VAT on imported coal.
Bangladesh is one of the countries where the cost of electricity production is among the highest in the world and the electricity consumers are bearing the brunt of it. The use of rental and quick rental power plants that the present government has installed to obviate the huge load shedding is still draining away most of the money for the power sector.
If the production cost increases even more it is not right that people should always pay for the increased cost when there is a huge system loss and rampant corruption in the sector. People’s savings are very fast depleting to maintain their living. They are really worried about their future. At this moment, the proposal of electricity price hike has indeed come so easily but badly damaging.
