Surge in basic power tariff - Miftah Ismail's critical analysis of government failures
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00:00Our morning was not good, the base tariff has been increased by Rs. 7.12 per unit of electricity.
00:08How much burden can it put on the public?
00:14The question you are asking, how much burden will it put on the public if Rs. 7.12 per unit of electricity is expensive?
00:22We use 125 million units of electricity in Pakistan.
00:27The public will have to pay more than Rs. 1,000,000 for electricity.
00:34So, Rs. 1,000,000 will have to be paid by the people of Pakistan.
00:38This will make a difference in Pakistan.
00:40Mr. Miftad, in most of the bills, it is also seen that you have not consumed as much electricity as is taxed.
00:51So, if you are thinking of giving relief to the public, can these taxes be reduced in any way?
00:58Yes, the government imposes a lot of taxes.
01:02Sometimes the tax reaches up to 30%.
01:05It depends on which consumer it is.
01:08If the consumer is domestic, commercial, home consumer, protected, unprotected, etc.
01:16But there is a good tax.
01:19And if there is a tax after Rs. 7.12, then obviously there is more tax.
01:25Every Pakistani, including children, old people, men and women, will have to pay at least Rs. 4,000 per year for electricity.
01:39So, if there are 6 people in your house, you will have to pay Rs. 24,000 on average.
01:44And there are taxes as well.
01:48Why aren't taxes reduced? Because the government needs them.
01:51The government has its own expenses.
01:53The government is not ready to reduce them.
01:55The government is not ready to reduce the government's current expenditures.
02:04The government has increased their expenses by 24%.
02:07This includes part of the salary and 50% of other expenses.
02:11And at the same time, the government has increased its expenses under the PSDP.
02:16In which it has given Rs. 500-600 billion to its MNAS and MPs.
02:20So, the government is not ready to reduce those expenses as well.
02:23Because the government is not able to reduce the loss caused by the transmission and distribution of electricity.
02:31Because people are not paying their bills.
02:33People are not able to take their bills back.
02:35So, the government has to spend a lot of money.
02:39And in order to fulfil that, the government is caught by the people.
02:43And the government takes money from the people in the form of taxes as well as bills.
02:47I mean, that is very unfortunate.
02:49The government is not able to control the expenditures.
02:51The government is not able to control the bleed.
02:53I mean, whether it is the government employees or the various institutions,
02:57you can see that there is an increase in the number of government employees.
03:00Now, tell me, this is what I was going to ask you in the basic question.
03:03What is the state of our exports?
03:07The state of the industrial sector is in front of everyone.
03:09It seems that this is the only way left for the government.
03:12Orangzeb is focused on this only.
03:18It is based on loans and taxes.
03:20You are talking about electricity and gas.
03:23Why is it increasing?
03:25One reason is that all the inefficiencies in the government's electricity sector,
03:29for example, in the companies of Sui Gas,
03:32there is more than 15% which is called UFG, unaccounted for gas.
03:38You have put gas in your pipe and 15% is less here.
03:42Now, you do not know whether this gas has been stolen or leaked.
03:48You do not know this.
03:49Electricity companies do not know this.
03:51But we blow 15% of the gas.
03:53We import such expensive gas, but 15% of the gas is UFG.
03:57The government has also failed to reduce it.
04:00There are 17-18% line losses in electricity.
04:04The government gives you permission up to 11%.
04:07But the government does 18%.
04:09After that, in gas, you pay the bill at many places, but the bill does not come.
04:13This is not a part of UFG.
04:15It is apart from UFG.
04:16And in electricity, there is theft.
04:18You pay the bill and the bill does not come back.
04:21So, apart from that, there is a loss.
04:23So, this system of inefficiencies is being imposed on us by the government.
04:27So, this is not a part of UFG.
04:29It is apart from UFG.
04:31So, this system of inefficiencies is being imposed on us by the government.
04:35Because of this, the industries and industries of UFG are very affected.
04:40Especially the industry of UFG.
04:42And if our electricity and gas from India, Bangladesh and other countries,
04:47which we compete with in the markets of the world,
04:50will be much more expensive than them, which it is,
04:53then it becomes difficult for our industries of UFG to compete with them.
04:59One issue that is being expressed is that this increase will not stop here.
05:04It will continue in the coming days.
05:06The government assumes that the conditions of the IMF are very strict,
05:09which we have to comply with.
05:11But the IMF does not dictate that you have to increase the electricity tariffs to this extent
05:17and increase the tariffs on those who use this unit.
05:20These are our own policies.
05:22So, what will you say on this occasion, when the government says that
05:26if we comply with the conditions, then we have to increase the money and increase the tariffs?
05:31The IMF has never said that you should reduce your electricity consumption.
05:35You should try to reduce it.
05:37The IMF does not forbid you.
05:39The IMF does not say that you should not take only 90% electricity bill.
05:42The IMF says that you should take 100% electricity bill.
05:44Why don't you take the electricity bill from the person to whom you have given the bill?
05:48The IMF has not told you that you should go into transmission and distribution loss
05:52of 18-17% electricity.
05:55So, you can collect it, you can improve it.
05:58You have not brought it.
06:00So, the IMF says that you should not increase its circular debt.
06:03If you want, you can either fix these things.
06:06If you cannot fix things, then the other expenses in the budget,
06:10which you are giving to MNREG and MPS,
06:12if you put Rs. 200-400 billion in electricity, then it can also improve.
06:16But in the preference of the government, you have to maintain your own expenses.
06:20In the preference of the government, you do not have to fix your inefficiencies.
06:24In the preference of the government, you have to give money to the provinces
06:27so that they can do political projects there.
06:29And you are the people of Pakistan.
06:31That comes last in preference.
06:33So, your access to the government could not be reached.
06:37And your tax and your electricity bill.
06:39So, Mr. Miftar, you mentioned inefficiencies.
06:42So, the agreements made with the IPPs, that seems to be one of them.
06:47So, do you think we need to revisit that too?
06:51Look, this question is being raised a lot these days
06:54that the agreements made with the IPPs should be revisited.
06:57The fact is that the IPPs were implemented in Pakistan at three times.
07:01One, in 1994, under the policy of Benazir Bhutto Sahiba.
07:05And they have basically expired.
07:07So, there are no such payments for those IPPs.
07:11After that, the second was implemented under the policy of General Musharraf in 2002.
07:16They were implemented under the policy of 2002, but they were implemented until 2012-13.
07:20And in the era of Imran Khan, the Pakistani-owned projects were renegotiated.
07:27But the ones that had IFC or other international institutions,
07:31they could not be renegotiated.
07:33And they were not that efficient either.
07:35So, it was good that they were renegotiated.
07:38And the third project was implemented by China.
07:41And IMF, especially after the policy of 2013,
07:45which was implemented under CPEC and others.
07:48IMF has a lot of insistence to renegotiate it with China.
07:52Because you know that the US and China are poles apart from each other.
07:57And there is a stress tension.
07:59For Pakistan, it is a very difficult path.
08:01You have to keep in touch with the IMF, but you cannot fight with China.
08:06And the four big ones, Bikki, Baloqi, Haveli and Tirumu,
08:12are owned by the government of Pakistan.
08:14So, how will you renegotiate it?
08:16It is beyond my understanding.
08:18But they are talking about coal plants,
08:20that you should renegotiate the coal plants in such a way
08:23that the money we have to pay in the next 5 years,
08:25we can pay in the next 10 or 12 years.
08:27But at the same time, let me also tell you that
08:30even now when you and I are talking,
08:32China is making the Chashma-5 nuclear plant.
08:36China is making the Damirbhasha Dam.
08:40China is making the Mamand Dam.
08:42So, when you are taking more loans from China
08:44and getting them to work,
08:46at that time, telling their old plants that
08:48we will not pay you now, or we will pay you later,
08:50or do not renegotiate.
08:51That can be very difficult.
08:53We are trying, the government of Pakistan is trying,
08:56but it cannot be one-sided.
08:58It cannot be.