FeaturedNationalVOLUME 18 ISSUE # 41

Electricity bills: last straw on the camel’s back

Mass protests have erupted all over the country against high voltage electricity bills which have gone beyond the paying capacity of all categories of consumers. Traders have come out on the streets showing their anger, while crowds are torching electricity bills in the bazaar.

Power distribution offices have been picketed by angry demonstrators and meter readers have been assaulted in Gujranwala and other cities. Consequently, power authorities have called for extra police force to save them from attacks by raging mobs. According to a social media report, an elderly person jumped off a bridge in Islamabad, due to his high electricity bill. Another video showed announcements being made from a mosque, asking people not to pay their bills.

People are up in arms against the callous negligence by the government which has thoughtlessly upped per unit rates of electricity over Rs50 which is said to be the highest in the world. What is more atrocious is that the government has imposed a wide range of taxes and levies which add up to about 40 percent of the costs of electricity. The result is that a wage earner, who earns about Rs30,000 per month, has received bills amounting to Rs40,000. No wonder, many people have had heart attacks while some have committed suicide. In short all hell has broken loose.

Most political parties have come out in support of the protests by consumers. The MQM in Karachi has warned that if the government does not move quickly to defuse the situation, the protest by citizens may take the form of civil disobedience and result in the collapse of state authority. Leaders of the PPP, the PML-N and the PTI have also urged the government to take notice of the situation and provide immediate relief to the consumer. On the one hand, the Jamaat-e-Islami has called for a countrywide strike to voice protest against inflated bills.

Both the unit price and the various taxes imposed on the bills are outrageous and have no parallel in the world. All over the world, on an average, electricity costs form about 10-20 percent of the salary of an average wage earner. But in our case the monthly electricity costs are now more the monthly salary of consumers in the lower and middle income brackets. Hence, the public outcry and gathering demand for relief.

Corruption, mismanagement, wrong policy decisions by successive governments, negligence by energy authorities, theft and pilferage all play their part in raising the cost of electricity to unaffordable levels. Transmission losses are in the range of 25-35 percent which is among the highest in the world. The powerful and the rich don’t pay their bills while free electricity provided to the civil and military bureaucracy costs the exchequer hundreds of billions of rupees. The costs of all these acts of omission and commission are put at the doors of the poor consumer.

Things have now come to a head and a solution to the problem cannot be delayed any longer. The increasing price of electricity is essentially a governance failure. The ruling classes, instead of cutting the frills of their own luxurious lifestyle, impose heavy indirect taxes on fuels and power bills to pay for the state’s ballooning expenditure. A reading of power bills shows that higher tariffs alone are not responsible for the increase in electricity bills; high taxes also contribute at least 40pc to each bill. The government charges include electricity duty, TV fee (Rs35 per bill), general sales tax (GST), GST on fuel price adjustment (FPA), excise duty on FPA, income tax, etc.

The authorities have miserably failed to implement energy sector reforms to control growing theft and power and gas sector losses. Instead periodically they increase prices to recover lost revenues. Feeling the heat of the moment, Prime Minister Anwaarul Haq Kakar held emergency meetings with power sector authorities to find a way to provide some relief to consumers.

As suggested by experts, the government should take the following steps to deal with the crisis.

One, at least a third of the electricity bill is made up of taxes and other government charges. Likewise, almost a quarter of the petrol price consists of taxes and levies. Therefore, the current bills should be withdrawn and revised ones issued in which most taxes should either be dropped or at least halved. Similarly, undue levies on petrol should be withdrawn.

Two, consumers should be provided with the facility of paying the revised bills in two or three instalments.

Three, the luxury of free electricity should be abolished across the board.

Four, as part of systematic reforms all those involved in corruption, theft, pilferage and general mismanagement should be dealt with a heavy hand.

Five, in the larger context, the government should change its present policies to control inflation and improve the economy to provide some breathing space to the harassed consumers.