The Metaverse is real. Pakistan is in it. It is represented by its bureau of statistics, the PBS. In that alternate reality, electricity consumers of Pakistan have paid 30 percent lesser for power bills than they did a year ago. What wouldn’t millions stuck here on this side of the universe give to travel just for lower electricity bills.
For reasons known best to the PBS, the electricity tariffs have been computed down 30 percent year-on-year, as monthly inflation numbers were released the other day. The PBS is no stranger to inaccurately computing power tariff changes for CPI purposes, but this one takes the cake. Some have even gone the distance of calling it a “fudged” cake, but let’s just call it another honest mistake, amongst many.
So here is what it actually looks like for the paying consumer. The base tariffs are up significantly, almost for all consumption categories, from the same period last year. For the bulk of consumption slabs, the base tariffs have nearly been doubled year-on-year. So surely then, it must be the quarterly or monthly adjustments that must have led to such a substantial decline in PBS’s calculations.
The Quarterly Tariff Adjustment (QTA) in place for August 2022 (the reference period) at Rs1.72/unit was marginally higher than the QTA for same period last year. So maybe it is the monthly Fuel Price Adjustment (FPA)? Well, the adjustment in August 2021 was 80 paisas per unit. For August 2022, the government offered a waiver on most slabs, and reduced rate for protected categories. At best, this would make it a net neutral event.
And this is without considering that the government later decided to not waive the FPA, but instead spread the collection over six months of Rs1.6/unit installment each. Even if the PBS assumed zero FPA for August 2022, there is no way on the planet, that this takes the final tariff lower by 30 percent year-on-year.
Assuming if the PBS is considering September bills as reference as opposed to August – the FPA for September 2022 at Rs4.3/unit is three times the FPA in September 2022. And the base tariff is even higher from last month. And there is no waiver on FPA either – it is just a deferment which now means collections will be made over six months. If anything, that adds up to the overall FPA collection. It just doesn’t add up, whichever way you look at it.
And there is also a little matter of removed previous slab benefit, which was not in place in the same period last year. Why it makes the PBS numbers farther from reality is that the methodology never accounted for the one-slab benefit. It did not matter back then, but now that the benefit stands no more, the real impact on price is far more than what the PBS would show for.
It is common knowledge that Ishaq Dar has been mandated to bring inflation down. Let’s wish him luck on that, also hoping that in the process he does not end up bringing whatever little is left of PBS’s integrity and sanctity, down with it too.