The “generator” bill ate wages

When the electricity plan was renewed in March 2019, the Ministry of Energy stated that the liberalization of electricity rates would reduce the monthly cost paid by consumers to obtain electricity from the EDL and from neighborhood generators by 10.7% for large consumers and 14.5% for small consumers. At that time, the plan said that raising the rate for consumption of electricity produced by the EDL, from an average of 138 to 217 pounds, would be less than the total paid by the consumer during that period.

According to the figures available from Electricidad del Líbano, and included in the electricity plan that was presented to the Council of Ministers at the time of the plan, the section with the lowest consumption will pay an average of 130 thousand pounds per month, or the equivalent of 19.2% of the minimum wage, while the next tranche will pay 230 thousand. Lira per month on average, or the equivalent of 34% of the minimum wage. The Corporation’s statistics also indicate that 74.8% of Lebanon’s electricity subscribers consume less than 920 kilowatt hours per month and their subscription capacity does not exceed 20 amps, while the same two segments have subscription capacities with generators that do not exceed 10 amps.

These two segments are the least consumed and represent the largest number of subscribers. At that time, according to data issued by the Ministry of Energy, the cost of subscribing to neighborhood generators was 405 lira per kilowatt hour and 15,000 fixed lira for 5 amps, compared to 300 lira in 2018 and 12,000 fixed lira for 5 amps .
However, the Ministry of Energy, which sets the cost of the monthly subscription to generators, has increased the generator rate to 591 pounds per kilowatt hour since July 2020 and increased the fixed allocation to 20 thousand pounds for 5 amps and 30 thousand pounds for 10 amps, an increase of 46%. In practical translation, that is, the cost incurred by these two segments has become 151,000 pounds for the first tranche, in which more than 375,000 subscribers, and 260,000 lira for the second tranche, in which more than 259,000 subscribe. subscribers.
The reflection of this increase goes beyond the limits set by the Ministry of Energy in its March 2019 plan to liberalize electricity rates based on the different sources of electricity supply to consumers. The irony is that the increase in the rate for generators occurred despite the decline in diesel prices, which represent the most important percentage and weight in the calculation of the generator rate. In the ministry’s data to determine this monthly fee, it says the following: “The fee is based on an average price of a diesel fuel plate at a value of 15,142 pounds, after taking into account all the expenses, benefits and costs of generators, as well as a good profit margin for their owners ”.
In practice, the price of diesel fuel has fallen from its peak in May 2019, when it recorded 18,950 pounds per plate, to 15,142 in October 2020.
It is also striking that the Ministry of Energy used to say in its plan that the price of the tariff would be an equal price according to consumer segments, and that it would be linked to the price of oil derivatives. The 217-pound-per-kilowatt rate was calculated on the basis of the price per barrel of $ 66, compared to the current rate of 138 pounds per kilowatt, based on the price of $ 20 per barrel.
This increase in the rate of private generators is justified by being linked to the uncontrolled market exchange rate and its circulation at a price that ranges between 7,000 and 8,000 pounds, and considering that generators need maintenance, oil replacement and spare parts that are purchased in market dollars. Generator owners used this as an excuse to pressure the Energy Ministry to raise rates and threaten to cut electricity to homes at a time when demand was at its peak in the summer of June, and the factor of electricity production was at its worst. Indeed, they carried out their threats last summer and shut down the generators, on the pretext that diesel had been cut off the market.
Worse still, the Ministry of Energy submitted to their threats, while the issue of the liberalization of the official electricity tariff is still pending with families, linked to the fact that it is one of the most important demands of the International Monetary Fund as a prerequisite to grant loans to Lebanon. In other words, the increase in rates in light of the evolution of the exchange rate and the demand of the fund, will be very hard for consumers and can consume most of the income of poor families. Consumers currently pay exorbitant fees to obtain erratic electricity and are subject to extortion and threats from generator owners supported by parties and influencers in the regions. The effects of tariff liberalization will become enormous burdens for poor families, whose rate is already over 50% and have not yet received any increase in their income.
So this confrontation must be based on an increase in wages. The liberalization of electricity rates must be accompanied by an increase in wages equal to the inflation that has eaten up wages. He is not supposed to submit to this authority, who believes that his priorities and efforts are centered on subjugating the generators of the mafia, on the one hand, and the forces of international influence, on the other. The Ministry of Energy submitted to the generator owners despite obtaining diesel at the subsidized price and despite the low global price, and had made the decision to increase the rate in line with the demand of the International Monetary Fund.

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