Non realistic tariffs create debt

Shargh Daily writes that recently, operators of high voltage power posts gathered in front of the Ministry of Power in order to amend their contracts. The producers of power industry equipment have a similar complaint: The Government owed them 220 trillion IRRs (5.9 billion USD) by November 2017 and since the debt has not been cleared, the amount is increasing. One of the consultants of the syndicate said that since the price of electricity in the country is low, the Energy Ministry cannot cover its costs and thus cannot pay its debts. The article makes no mention that a few weeks ago when the Government handed the budget bill to the Parliament, one of the main concerns was the increase in the price of utilities including water and electricity. However if the price of electricity is not increased, the problem of covering the costs of the Ministry will remain. Without setting realistic prices, the Government has no way other than large subsidiaries in the electricity and fuel sectors to pay its debts.