Electricity consumers in Pakistan paid less this year in October than a year ago. And only 5 percent higher than last month. This is despite the Prime Minister’s and Punjab Chief Minister’s generous respective electricity subsidy schemes no longer in play, having lapsed in September. Credit must be given to the authorities in Islamabad for working tirelessly to bring electricity tariffs down.
AwaisLeghari can wait for another day, as this month’s credit goes to the Pakistan Bureau of Statistics (PBS). It takes some doing to turn at least a 10 percent year-on-year and 20 percent month-on-month increase to negative 0.5 percent and 5 percent, respectively. Try telling the paying consumers their effective power tariffs were lower than last year or marginally higher than a month ago. All the niceties in replies must then be directed towards the PBS because, in the real world, the tariffs went up significantly in most cases.
How did the PBS arrive at the magical number is best left for the PBS to explain. An explanation may never arrive though, as this is not the first time the PBS has mistreated tabulation of energy price changes for CPI purposes, left unexplained every time (see: The PBS Metaverse: published October 4, 2022).
Hard facts now. The monthly Fuel Charges Adjustment (FCA) for October bills was slated at negative 85 paisas per unit. This is lower by nearly 50 paisas per unit month-on-month and Rs2.56 per unit year-on-year. Similarly, the Quarterly Tariff Adjustment (QTA) applicable in October 2024 offered a respite of Rs1.53/unit year-on-year and stayed unchanged month-on-month. This is where perhaps people would be made to believe the overall reduction in tariff looks plausible.
Only that it does not take into account the significant change in base tariffs that was delayed by a quarter. The four consumption slabs (protected and unprotected up to 200 units) that constitute close to 90 percent of all domestic consumption underwent up to Rs7/unit upward change in October 2024 over September 2024. Mind you, the negative FCA does not apply to consumption up to 300 units, excluding 90 percent of all consumers which means four of the five quintiles do not undergo change in case of negative FCA (here is hoping the PBS knows it too).
The benefit of FCA over last year is reduced to Rs1.7/unit which was the total adjustment in October 2023. There is also a small matter of added fixed charges which have a more pronounced impact on higher consumption slabs. Mind you, the calculation in this article does not even account for the rather generous Rs14/subsidy extended to nearly all Punjab consumers for three months. That subsidy was meant for all consumption between 201-500 units. The actual increase in tariffs for October over September is much higher than used for simplistic analysis in this piece.
Does the PBS do it deliberately? Probably not (or we don’t know). Does it have a responsibility to at least come up with an explanation when questioned? Probably yes. The PBS, in the past, has not shied away from improving on its methodology shortcomings, not least in electricity and gas pricing. It would not hurt to do more of the same, and without having to wait for the next rebasing exercise. It does not reflect well on an institute as reputable as PBS to keep making questionable mistakes. These are not based on DC rates or market surveys either. Some people do keep a tab.