Daily Times

If life wasn’t already miserable enough for the working-class common-man of this country, especially because of food inflation, rising electricity tariffs could well prove to be the last nail in the coffin of many a Pakistani. It turns out that electricity tariffs have risen by no less than 30 percent in the three years of the present administration, with the trend expected to pick up pace in the remainder of the electoral cycle. The national average tariff in 2018, when PTI came to power, was Rs13.92 per unit. Now it is Rs15.54; which means that the power sector’s losses and inefficiencies are also passed onto consumers.

Such trends have left both consumers and businesses scratching their heads; because they fly in the face of claims that the government is providing all sorts of incentives imaginable to push the economy into high gear. Instead, the government’s approach of making very tall claims and not living up to them more often than not is causing more harm than good. The reason is that all sorts of producers, large and small, rush to the cheap credit facility to ramp up production and, in some cases, earn more exports. But when they find out, after making all the initial expenditures, that the cheap credit had very short limits, and the rates at which power was promised will no longer be honoured, then all bets have to be called off half way through the process.

Expensive energy increases fixed input cost and prices our businesses out of the market even before they are able to enter it. And failure to control them means the government’s efforts to support the economy are also half-hearted. This is bad news and there are chances that more is yet to come. Because the experiment with this fiscal year’s expansionary budget is also giving cause for worry. There’s still the not-so-small matter of convincing the IMF that it will do the job without the kind of tariff increases that they have demanded. But if things are not on track by the time the government talks with the Fund next month, then there are going to be yet more tariffs if the bailout program is to go on. The least the government can do, then, is provide transparency to producers and consumers about the kind of tariffs to expect in the next two years. *