The state-owned utilities of the country are all gearing up for hiking the prices of the services they offer to the customers. From state-owned Petrobangla to the six government-owned gas distributors to Bangladesh Power Development Board - all are in the mad race of increasing prices. The latest to join the pro-hike bandwagon is Dhaka Water Supply and Sewerage Authority or Dhaka Wasa. They all want to relieve the government of the burden of paying subsidies in gas, electricity and water. A patriotic intention indeed!
These utilities are doing it in complete disregard of the fact that such price increase will compound the sufferings of the people at a time when they already being battered by the impact of the Covid-19 pandemic. It will also hurt the economy as it is struggling to recover from the pandemic losses.
The proposals from the gas operators (responsible for retail price) and Petrobangla (which looks after bulk price) are pending with Bangladesh Energy Regulatory Commission which is scheduled to hold a hearing. The proposal on raising power tariff will also be placed in the BEC, while the proposed hike in the water tariff has been sent to the LGRD ministry for approval.
Gas operators are aiming for a big kill. They want a 117% raise in the price of gas at retail level.Separately, Petrobangla, the key state-owned bulk supplier of the fuel to the distributors submitted its proposal for hiking the price. But at what percentage was not immediately disclosed. As it has been happening on the gas sector, the state-run Bangladesh Power Development Board has made public its intention to raise the power price by 66 per cent. Though the proposals will have to pass through the BERC it is, however, almost certain that the utilities will get most of what they want. Because this is what the government wants.
A rise in the gas price as high as it has been proposed will definitely have a huge adverse impact on both house and industrial uses. The ultimate sufferers are the ordinary customers who are to pay more in cooking their meals as well as buying the industrial products which are likely to become costlier because of high cost of production.
Provided the proposals get the BERC nod a household consumer will be paying Tk. 2000 for a single burner, up from current Tk. 925, while for a double burner user it will go up from Tk. 975 to Tk. 2175. The price of cooking gas will jump from Tk. 12.60 per square meter to Tk. 27.37 per square meter.
The proposed hike will increase the cost of industrial production, generation of electricity, production of fertilizer besides adversely impacting small and cottage industries, tea gardens, hotels and restaurants. This will further aggravate if the government goes for the hike in electricity tariff. Coming close on the heels of last November's diesel price hike and rising prices of the essentials, including rice amid the third wave of Covid-19 pandemic the proposed hike in gas and electricity price will have a disastrous effect on both household and industrial consumers.
While going for such a big leap in the prices of the utility services, the authorities have once again restored to their old arguments: the government can't afford the huge amount of subsidies paid on this account.
A similar argument has been put forward by Wasa director Taqsem A Khan who defended the utility's latest proposal to raise water rates by 20% from July provided the government approves it. At a press briefing on this issue he said a public utility like Wasa can't go on begging for money from the government, meaning that government subsidies on supply water to the city consumers must be cut. Why should there be subsidies for the capital city dwellers? he wondered.
He said since Dhaka Wasa under its Act can raise the tariff by 5% only. Since the raise is proposed at 20% it has to go to the government ministry for approval.
According to him Wasa currently spendsTk 25to produce one litre of water, whereas itsells the same amount of water at Tk 15.He said this disparity between cost of production and the sale price must stop so the government does not pay Tk. 10 subsidy per litre of water.
The proposal placed before a meeting of Dhaka Wasa Board on February 7, the price of each unit (1000 litres) of water will be Tk 21 for residential use and Tk 55 for commercial use. Currently it is Tk 15.18 for residential use and Tk 42 for commercial purpose.
The Wasa director has other reasons for his proposal to hike the water price. That's the foreign loan the utility has taken for implementation of a number of projects aimed at what he said improved supply of pure drinking water to the users.
As the utilities continue to justify their ill-timed moves the consumers get worried. The price increase has been offered at a time when the consumers are already being grinded by the rising prices of other essentials, including rice, their staple. Recently, both the agriculture minister and the food minister publicly wondered why is the rice price is increasing despite having good harvest and satisfactory stocks. In regard to gas, the state minister for power has found the proposals off the mark and suggested a lower rate of increase.
To most experts, who normally echo the feelings of the customers, the utilities could have avoided increasing prices by improving their competence and efficiency and most importantly by cracking down on pilferage, stealing, unauthorised connections and wastages caused in the name of so-called system loss. It is unfair to make the customers pay for their incompetence of the service providers. Subsidy on utility services is common in many countries, especially welfare states. It should not be seen as a charity or privilege. Rather it's the people's right to get it provided it goes to the right kind of people for the right cause.
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