NewsElectricity tariff hike: Costs vs pricing

June 5, 2013

Not a single credible cost figure was quoted by any of the editors and reporters, who wrote miles of editorials and reports over the last few weeks on the subject of electricity costs and prices. All such editors and reporters, and the readers alike, and the protestors in Parliament and on the streets, took cover under much convenient terminology such as ‘corruption’, ‘private power’, ‘mafia’, ‘relief’, ‘subsidies’, ‘white elephant’, ‘solar power’, ‘privatization’, ‘reforms’, ‘water released’. Although electrical engineering involves a bit of complicated mathematics, the business of electricity production and supply involves arithmetic and logical thinking, just as in any other business.

I do not intend to discuss the pricing of electricity in this article, but would like to enlighten the people protesting against electricity costs, blaming everybody all the way, about costs. Look at the two tables below and answer the questions that follow. These questions can be answered by any person: politician, teacher, student, newspaper editor, any reporter, TV journalist or engineer.