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- TUE, 04-25-2023, PM 4:41
- TAYSEER AL-ASADI
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Former Minister of Electricity Louay Al-Khatib reviewed, on Tuesday, the main problems afflicting the energy sector in Iraq, stressing that the provision of electric energy will not be without lifting government subsidies and considering it a non-free commodity.
Commenting on the Prime Minister's visit to the Operation and Control Department, Al-Khatib said, "These and other cases that your Excellency reviewed during your recent visit to the Operation and Control Department are individual cases and may be regional, and are not general to the overall performance of the network, and are limited to the performance of the relevant distribution departments, and therefore are Secondary to the crisis of scarcity of equipment and fairness of distribution.
He warned that "the electricity crisis in Iraq is mainly caused by government subsidies on tariffs and fuel, as well as government domination of the electricity sector, and therefore its economic and institutional causes before they are technical."
He continued, "Simply put, the price of energy supply is linked to hard currency and international fuel prices, and therefore it is impossible to sustain energy supply to consumers and meet demand on the basis of government support that drains the treasury of a country with limited imports in light of the population growth in Iraq, which has exceeded the barrier of 2.6% annually. Meaning." When the pricing is zero or close to it, demand will be unlimited and indefinite, in addition to government support and government domination of this sector in light of a chaotic democratic system that will perpetuate mismanagement and corruption even more.
He pointed out that "the electricity sector recently costs the Iraqi state treasury about $20 billion annually in fuel costs at international prices, maintenance allocations, import and purchase of energy, and expansion of the network (production, transmission and distribution), while the sector is supported by 90% of the state, which is non-refundable. Domestic demand is met, no matter how hard governments try, and the sector will remain a loser and a breeding ground for corrupt people who live on government allocations of fuel and financing for government companies that are governed by political and factional quota protocols.
He addressed Al-Sudani, saying, "The solution will not be for you to go to the Operation and Control Department and transfer the requests of some citizens. Rather, the solution lies in your meeting with the heads of parliamentary blocs to explain to them the necessary reform steps in the economic and institutional files for this important sector, which has become costly on the federal budget at a value of 20 billion dollars annually." , and another 20 billion dollars annually as a direct loss to the GDP due to the scarcity of equipment for the sectors of industry, commerce and agriculture, and that the issue of canceling subsidies has become necessary and inevitable to avoid the inevitable collapse of the national network in the next few years.
He pointed out that "the decision to cancel the subsidy is a government decision that needs the approval of the Council of Ministers and political support from the ruling blocs in the House of Representatives so that it does not hinder the government's steps, and all of these need tax reforms as well as the inclusion of specific financial allocations for social protection networks so that support is exclusively for beneficiaries from limited-income societal groups." With the development of a solid and solid plan to privatize the production and distribution sectors gradually and with a time limit set according to international standards, thus financing the electricity sector will shift to attracting giant investments as well as the movement of investors in the stock market so that the sector becomes profitable, and not depending on government support that made it loser, draining the budget and costly output. country's local.
And he stressed the need to "cancel all lines of exceptions in supplying free energy to political parties and their affiliated institutions. As well as developing a tight collection plan for the entire network, especially from slums that exceeded a million slums in Iraq, by force of law, otherwise the supply is cut off centrally for groups that refuse to pay. It must also be imposed." Double fines and severe penalties for anyone found to have violated the national network.
He continued, "I explained these matters in detail during my many meetings in the House of Representatives and its committees in 2019, but the proposals were met with strong opposition from some, due to their collision with the personal interests of many deputies who depend on this sector and its government support in marketing their electoral campaigns, and the mention is sufficient for him."
And he added, "All institutions and media platforms stand against this education because they tend to populist discourse and what is consistent with the desire of society that does not want to pay the real cost of energy, while it sees it as a natural right that must be provided by the government, whatever the demand and regardless of the cost that does not want to be paid." be bound by it.”
He concluded: “Electricity is not a free service for citizens, but rather a commercial commodity, and its cost must be paid by the consumer 100% without any subsidy, otherwise it cannot be provided to consumers. And all the rumored media narratives about providing it to the people by governments in a subsidized manner is pure lies, with the exception of some The very few and limited examples that cannot be compared to Iraq, and they are usually not a rule.
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