OnDemand WTP Pricing Research

Doing away with pricing | Business Recorder

Any sector where the government is in the business of fixing pricing, there is some sort of circular debt. Energy is on the top – within it both petroleum and power prices are fixed by government while the recommendations of change, based on fuel pricing and other factors, is the job of regulator – OGRA and NEPRA.

There is no problem when the prices are falling as any government is happy to pass on the impact; while in the other case, it becomes a tough political decision. If you are in opposition, you would lose no chance to malign intentions of the incumbents in days of high pricing, but it hits you back, once you are in power. This is happening with Asad these days – what goes around comes around.

Politics aside, the government should not be in business of fixing prices. This should be left to regulators. In case of power tariffs, back in days of expensive FO and increasing oil prices, the fuel prices were not used to be passed on. Thanks to one of the many IMF programmes, the mechanism was formed where fuel became a pass through item. The PMLN gained popularity in days of improving fuel efficiencies – from FO to RLNG and coal, by passing on the impact of lower average fuel cost to consumers.

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Doing away with pricing | Business Recorder.