DUSHANBE, December 5, 2012, Asia-Plus — The Communist Party (CPT) leader Shodi Shabdolov, who is also deputy of the upper house (Majlisi Namoyandagon) of the Tajik parliament, considers that any decision to rise electricity prices in Tajikistan, where some 50 percent of the population lives below the poverty line, requires thorough analysis.
Commenting on a study by the World Bank,
Tajikistan’s Winter Energy Crisis: Electricity Supply and Demand Alternatives
, which notes that electricity prices would need to increase by roughly 50 percent in Tajikistan, Shabdolov noted that further rise in electricity prices would cause a storm of indignation in Tajikistan.
“Giving such recommendations, the World Bank even does not think that current electricity prices set for residential customers at 11 dirams per one kWh are burdensome for the overwhelming majority of the country’s population,” said CPT leader. “I think these recommendations of the World Bank are spun out of thin air.”
According to him, the electricity prices must be raised for those who have palaces with swimming pools and saunas, competitive industrial like TALCO (Tajikistan Aluminum Company) and cotton-ginning factories enterprises.
“If the electricity prices are raised for small enterprises, they will fail and the number of unemployed people will increase in the country several times,” said Shabdolov. “As far as the agrarian sector is concerned, further rise of electricity prices will be the final nail in its coffin.”
We will recall that the World Bank’s study notes that Tajikistan’s electricity system is reportedly in a state of crisis approximately 70% of the Tajik people suffer from extensive shortages of electricity during the winter.
According to the study, one of the key issues that will need to be addressed is that with the current low electricity prices, the plan to address Tajikistan’s electricity crisis is not financially viable; electricity prices would need to increase by roughly 50% in the short term. It is expected that a price increase of this size is needed as soon as possible to: (i) dampen growth in demand by providing an incentive to use energy prudently; and (ii) help fund part of the cost of the investment program. A delay in price increases would delay the closing of the supply-demand gap, resulting in extending the costs associated with load shedding. Such a price increase would be roughly one third of the estimated future cost of supply and below the estimated willingness to pay for most consumers. The resulting electricity price would be well below the level of electricity prices in other countries in the region. The exact size of the required price increase should be determined from a detailed financial analysis coupled with a prioritization of investments in the power sector and social safety nets to protect the poor.
