Private Sector Highlights Downside of Power Subsidies

The controversial policy of paying subsidies to the loss-making power sector that has kept electricity prices low for consumers is unsustainable and has put private power producers in danger of bankruptcy, the head of the Power Generation Companies Syndicate said.
“As long as the government insists on paying $1 billion in subsidies to the power sector annually, the industry cannot thrive and the gap between power generation capacity and demand will keep rising,” Barq News also quoted Ehsan Sadr as saying.
“Raising electricity tariffs and charging real prices is the only realistic solution to help the Energy Ministry tackle its financial crisis. Having said that, vulnerable social classes need to be supported by special aid packages.”
According to the official, cutting subsidies will increase inflation, but combating the growing menace needs courage as the problem should be tackled.