Increase in electricity prices: Smooth distribution must be ensured at consumer’s level

Bangladesh Energy Regulatory Commission (BERC) on Wednesday announced that the retail price of electricity has been increased by Tk1.52.

The wholesale price is Tk1.39. The decision to increase electricity prices by a maximum of 19 percent at the wholesale level and by 15 to about 20 percent at the retail level is the highest in a decade and a half in percentage terms.

Although this decision to increase the price of electricity is necessary for various reasons, its impact is not limited to electricity bills, but will affect all sectors of the economy, starting from the daily lives of the common man.

However, no changes have been made to the life line facility considering the low-income people.

This is positive, but the new tariff will increase the overall cost of electricity.

Even after the new decision comes into effect, the government will have to work to save electricity and maintain normal electricity supply at the consumer level.

Because if the demand cannot be met at the desired level after imposing additional electricity costs on consumers, public discontent may increase.

Increasing electricity prices will increase the production costs of export-oriented industries, including ready-made garments.

This will weaken the competitive advantage of Bangladeshi products in the global market.

Meanwhile, the struggle for survival will increase for entrepreneurs in small and medium industries.

There are fears that many may decide to reduce production or shut down completely.

Additional pain will also be felt in household expenses. Production costs in irrigation systems in the agricultural sector will increase.

According to experts, if the price of electricity increases, it will create pressure on everything from transportation of goods to retail prices and fuel inflation.

Bangladesh is overly dependent on oil-based and imported gas-based power plants for power generation.

On the other hand, the government has to pay large sums of money to private plants in the name of capacity charges even if they do not generate power, which has deepened the financial crisis of BPDB.

There is also the issue of coordination with the recommendations given by the IMF.

Meanwhile, the cost of producing solar and wind power is rapidly decreasing.

Increasing public and private investment in this sector will reduce dependence on imported energy products and reduce production costs in the long run.

If the reform process of the electricity sector is not initiated, the government may lose the trust of the general public.

For this, not only price increases or adjustments are the solution, but also sustainable development of the entire sector is necessary.