There is a lot of merit to the Power Development Board’s proposal to increase the price for electricity by 18.12% from January.
If implemented, the proposal is projected to reduce government subsidies on power by over a third from the current rate of almost a billion dollars (Tk7,500 crore).
Bangladesh is not a rich country. Taxpayers cannot afford to throw away such huge amounts of money on subsidising power.
Increasing the price of electricity will both save vital public funds which can be better spent on education and development, and create a more rational pricing structure in the energy market.
Subsidising energy production distorts the marketplace. By encouraging waste and depriving power companies of funds for reinvestment in new production sources, it delivers less energy than the country needs. Irrational subsidies are one of the main reasons why the country’s industries still suffer from power shortages.
Higher prices can create more funds to invest in stable energy supplies and incentivise consumers to use power more sensibly. It will also have the effect of making investments in renewable power, like solar, biogas, and wind power, more attractive.
As a country where huge swathes of the population are at risk from rising water levels caused by climate change, it is important for Bangladesh to be more pro-active in reducing dependence on fossil fuels and supporting investment in cleaner, renewable forms of energy.
The proposed increase in the price of power is a smart move in the right direction and should be implemented.
Source: DT