The last government earned the wrath of the public for hiking the price of petroleum products despite rising oil prices abroad and an inevitable necessity to evaluate prices at home because the manner of the hike suggested that the government cared more about Nepal Oil Corporation’s dilemmas than that of the people. Now the Nepal Electricity Authority (NEA) is reportedly mooting a 10 per cent hike in electricity tariff to shore up its revenue. This decision too is unlikely to be received with enthusiasm as the people are already paying a sky-high electricity tariff. It does not take a mathematician to say that a country with an economically feasible electricity production capacity of over 40,000 MW is now requiring its citizens to pay an exorbitant average charge of nearly eight rupees per unit of electricity.

The inability of the NEA to deliver cheaper power is due to a combination of factors in harnessing hydropower. There has been an incoherent system of power production further made difficult by Nepal’s dependence on lending agencies which provide funds with strings attached. If that has contributed to increase the cost of electricity production, selling extra electricity has been a difficult enterprise as hydropower politics and geo-political realities limit Nepal’s advances. Although it now appears that the Authority’s proposed wet and dry seasonal rate slabs have been spiked, the Electricity Tariff Fixation Commission has presented it with a 36-point suggestion for the NEA to boost its finances. But in other ways too the NEA can tackle its losses, for example, by controlling pilferage and reducing leakage, which account for nearly 24 per cent of total production. The Authority had claimed to have controlled one per cent of it, which translates to a revenue of Rs 150 million. So the NEA must itself be introspecting as to where lies the answer to a majority of the utility’s problems.

Even if a tariff hike is deemed essential, it cannot come out of the blue, at least not without weighing what the Commission has recommended. But the NEA is accused of overstaffing, providing a number of free services including vehicles to employees, poor performance in metering power sales and collection, besides other unnecessary benefits even as the utility is bearing a loss of over Rs 1.5 billion. It is true that the NEA needs to beef up revenue and cut costs, and of course make up for the losses, but not always at the cost of the consumers. If a serious thought needs to be given on mega undertakings through financing agencies that will exact the price through manifold means, it should also be studied why electricity is so expensive in a country with unprecedented scope for its generation through hydropower.