Power crisis and price hike: Stop wastage, corruption in energy sector

EditorialProthom Alo illustration

To deal with the pressure of subsidy, the government has taken a decision to increase the price of electricity four times a year. Policymakers of the government announced this decision in a meeting with the visiting representatives of International Monetary Fund (IMF).

State minister for power, energy and mineral resources Nasrul Hamid had said last February that the price is being adjusted to deal with the shortfall. The price will be adjusted in phases during the next three years. The government increased the price thrice last year and once in the current year.

Though the IMF is happy with such steps from the government, there doesn’t seem to be any reason for the public to be happy about it. Organisations like the IMF and the World Bank are against subsidy and they recommend the same prescription for almost all developing country. It doesn’t matter to them even if this prescription drowns the economy of many countries.

There are two ways to deal with the cost of electricity production. The first one is to reduce the production cost and the second one is to increase the pressure on the consumers. The authorities of the power division are indeed focused on the second option. But, there are no answers to the questions why the production cost of electricity went up or why the energy sector successively became dependent on others.

When the government has decided to hike electricity price four times a year, what is the real picture? According to Prothom Alo reports, on some days there are 3,000 megawatts of power shortage, which is then bleached out through load shedding.

Then there is discrimination in case of doing this load shedding also. The rate of load shedding is higher in rural areas compared to Dhaka city. Some of the factories in Gazipur experience 10 to 12 hours of load shedding a day. It goes without saying that in this condition, the industrial production is dropping severely.  

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The corruption, wastage and wrong policies aren’t any less liable for the fact that the government is pouring in about Tk 400 billion (Tk 40,000 crore) as subsidy into the power sector.

The government has rendered the energy sector import-dependent without searching for gas locally. Now they are forced to pay subsidy for the fuel price going up in the global market. Though the oil-based power plants were supposed to be active for only five years, the government has taken that to fifteen years. They signed contracts to set up newer power plants one after another without ensuring the supply of fuel.

Now our production capacity has almost doubled than our demand. When these power plants are sitting idle, billions of taka is being paid as capacity charge (rent for the plant) annually. This in turn has increased the cost of electricity production. Why should the consumers take responsibility for this wastage or subsidy?  

Research director at non-government research agency Centre for Policy Dialogue (CPD), Khondaker Golam Moazzem told Prothom Alo that a few power plants have been set up by showing imaginary high demand and capacity charge is being paid for them. In the 2022-23 fiscal year, PDB has spent more than Tk 260 billion (Tk 26,000 crore) just to pay the rent of the power plants.

A consumer rights association, Consumers’ Association of Bangladesh (CAB) has said that hiking the rice by hiding the irregularities, wastage and corruption under the carpet isn’t fair to the consumers.  

Electricity is such a service that is directly connected with the industrial and agricultural productivity or in other words the overall economy of the country. If the price of electricity is increased the production cost of the goods will increase as well, which is in no ways desired. Then withdrawing the subsidy in electricity production entirely in a country like Bangladesh with a growing economy would not be right either.

If the cost of electricity production can be reduced, the megawatt-based production cost would decrease as well. So, instead of hiking the price in installments, the government should focus on eradicating the existent wastage, irregularities and corruption from the power sector.

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