Why impose higher bills on consumers?

The proposal placed by the Bangladesh Power Development Board (BPDB) and five government-owned power distribution companies to raise electricity prices is not just unfair but also an unimaginative return to the old playbook. According to media reports, the BPDB has proposed raising wholesale electricity prices by 17-21 percent, while all six distributors, including the BPDB, are seeking to raise retail prices by 15-29 percent across all slabs. If implemented, this move is going to hurt middle- and lower-middle-income consumers disproportionately.

These companies have cited the rising fuel import costs, capacity charges for idle power plants, and mounting operational losses of distributors as reasons for the tariff hikes as well as for restructuring residential billing slabs, the latter of which would particularly affect one group of users. The proposed slab structure will make electricity more expensive for consumers who use between 76 kWh and 200 kWh per month to run energy-efficient lights, fans, microwaves, televisions, laptops, and phone chargers. Currently, this group pays a lower rate for the first 75 kWh. The two lower slabs—lifeline users consuming up to 50 kWh and those using between 50 and 75 kWh—will remain, and their bills will also increase as per the proposal.

However, for the next tier of users, which comprises around 1.53 crore consumers, electricity will be priced at a uniform rate of Tk 8.20 per unit under the revised tariff, meaning they will lose the benefit of the lower rate currently applied to the first 75 kWh. This group, largely comprising middle- and lower-middle-income households, is already struggling with high food and essential commodity prices. Another vulnerable group that will feel the impact of the proposed hikes more sharply is farmers using electric irrigation pumps. Along with constructors, educational institutions, hospitals, commercial buildings, industries, and battery-charging stations, irrigation pumps would face increases of 15-29 percent. Sadly, this year’s floods, excessive rainfall, and high labour costs have already pushed many farmers deeper into debt. How fair would it be to ask them to absorb higher electricity costs in order to cover the losses accumulated by state-run entities over the years?

According to Prof M Shamsul Alam, adviser to the Consumers Association of Bangladesh, the distribution companies neither “have the authority to propose such changes” nor should they ask customers to bear the cost of their “unrealistic expenditures.” We agree with Prof Alam that these organisations, before passing on their losses and inefficiencies to end users, should first demonstrate that they have exhausted every possible avenue to reduce costs—from cutting back on business-class foreign trips by senior executives to self-financing the construction of administrative buildings, among other things.

Meanwhile, the government should expedite renegotiations with quick rental power plants to reduce the inflated prices currently being paid. We also hope that the Bangladesh Energy Regulatory Commission (BERC) will carefully consider the wider implications of the electricity tariff hike proposal at the upcoming public hearing this week.