Since decisions regarding electric tariffs are to be necessarily owned by the government in any case, it is still not clear why the Nepra Ordinance is being amended so that the government is out of the loop on any decision the regulatory body makes on the front. This is reportedly an IMF condition, which appears to think that the abolition of the governments role in the process would also remove the possibility of any populist yet fiscally unwise decision a la the recent reversal of the petroleum price hike. In reality, the step wouldn’t make a difference one way or the other, the local public not being aware of the subtleties of the law when it comes to different government bodies and their jurisdictions. If the public is to take to the streets, organised by the populist political parties, on the electric tariff issue, the government is going to find a way to change the tariff, Nepra’s word being final or not.
We can expect some very unsavoury decisions to come soon. The petrol price hike is bound to drag up the electricity rates, given the placement of thermal power plants in our fuel mix. True, hydel production will increase come summers, but so will the demand for electricity. The only effective, sustainable step the government can take at this stage is to spend money on the physical infrastructure of the various DisCos. The line losses and transmission costs of these concerns translate into a significant part of what households have to pay as part of their bills. Unfortunately, even that is going to require more money. If the country’s power grid were to finance this maintenance work itself, this would translate, initially, into much higher rates, so that option is out of the question. The international financial institutions, however, could help out with aid programs directed specifically at this particular problem.
