Minister Pun, who interacted with a group of media persons on Thursday said the long lingering issues of electricity tariff, fuel price adjustment and alternative power arrangement has eventually evolved as major constraints, crippling the development of the energy sector as a whole.[break]
“As every government in the past did, we also had an option to linger those issues. But we asked ourselves where would that push the country and have chosen to act responsibly,” said Pun.
Pun even tagged lack of revision of electricity tariff as one big obstacle to harnessing the hydropower potential. Amid risks of drawing protests from general public and serious criticism from political opposition, the government has left the electricity tariff unrevised for the past one decade.
However, on Wednesday Prime Minister Baburam Bhattarai agreed in principle to raise the electricity tariff. Based on that, the Electricity Tariff Fixation Commission (ETFC) has announced plans to raise tariff by 20 percent on average from January 15.
The decision has already drawn flak from the Forum for Protection of Consumer Rights - Nepal. “It is true that the revision will make the utility expensive. But without that we can not enable Nepal Electricity Authority to develop hydropower or enhance its transmission line or encourage power developers,” said Pun.
Referring to a similar lack of adjustment of petroleum prices, Pun said it was causing the country to suffer oil loss of Rs 1.26 billion a month. Worse still, the government has already issued Rs 3 billion in loans to the Nepal Oil Corporation (NOC) to make up for the loss over the last five months.
“Petroleum is neither our product nor our economy is strong enough to absorb such a huge loss. We simply cannot continue subsidizing the fuel; it is eating up money that should have gone for school and health post constructions,” said Pun.
Nonetheless, referring to the existing wide gap of Rs 19 between import and retail rates of a liter of diesel, Pun said the government will not raise the prices by such a huge margin as well.
He disclosed the government is planning to distribute the loss fairly between NOC, government and public. “This seems the best possible solution,” he stated.
As for the installation of Thermal Plant of 100 MW capacity, for which Bhattarai gave his nod on Wednesday, Pun admitted it will be costlier than importing power from India.
“But we have no other option. Question at this juncture is; should we leave the country in dark or take available alternative decision?” said Pun. Pun said the government´s effort actually is to facilitate private party to install the plant. If that did not happen, it could install the plant itself.
“We know decision to set up a thermal plant is controversial because of involvement of ´commission´ and possibility of anomalies. But we are committed to check such anomalies,” said Pun, adding that the government was also importing 100 MW of electricity from India to lower the looming power cut duration.
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