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Fair pricing of a government service

Wed, June 20, 2018 08:59

By the Gazette Editorial Board

Some parties have been showing considerable sensitivity towards any rise in the price of services, but one has to admit that the recent rise in the electricity bill, as announced last week, respected a strategy of social solidarity and took into consideration the right of the poor to a subsidised service.


A family's consumption of electricity is one of the main factors on which any government can measure the standard of living of its people. The ministry of electricity accordingly priced the kilo/watt of electricity according to the consumption of each house. Thus, the house that consumes no more than 200 kilo/watts, for example, would pay 36Pt per kilo/watt, that is around LE78 for the July bill with a price rise of LE18 if compared to the bill of June.


The people who consume more than 1,000 kilo/watts per month will pay 145Pt per kilo/watt, i.e. around LE1,491.5 for the July bill with a price rise of LE100 if compared to the June bill. This category will not enjoy any subsidy for the service.


Mohamed Shaker, the Minister of Electricity, chose to announce the price rise at a press conference. He also presented a precise schedule of 20 classifications of consumers, according to their actual consumption and the related pricing of the service.


Shaker denied connecting the rise in the service’s prices to the IMF demand in return for supporting the economic reforms. It was, he said, part of his ministry's policy of promoting the electricity sector and cutting the subsidy entirely by the financial year 2021–2022.


The price rise in the electricity service might not meet great opposition from citizens because of the real development they have found in the service since Shaker took the electricity portfolio in 2014.


Along with creating a large number of traditional power stations to overcome the terrible shortages of electricity the country used to suffer, the Ministry continues strengthening dependence on renewable sources of energy, such as wind and solar power, for the generation of electricity.


The marked development registered in this sector as well as in the electricity service could be why the citizens haven't expressed any opposition to this recent rise in prices of the service unlike the reaction when the ministry of transport introduced a rise in the metro fares.


Some parties attribute public reaction to the timing of the electricity price rise, coming, as it does, shortly before the end of Ramadan while people are busy with preparations for the feast as well as the Mondeal. The fact is, however, that this rise in electricity prices was no surprise. It was expected before the start of the new fiscal year.


Choosing to announce a rise in prices of some services by the end of June was an inevitable move for the outgoing government so as to cope with the allocations and spending of each ministry in the new budget for the 2018–2019 fiscal year.