The federal government has failed to curb electricity demand in the country including in rural areas despite implementation of "load suppression model" and usage of price management mechanism. National Electric Power Regulatory Authority (Nepra) has recently raised power tariff to Rs 8.70 per unit for those consumers who use only 100 units in one month whereas those consumers consuming 101-300 units will have to pay Rs 10.20 per unit and 301-700 units, Rs 14 per unit. Tariff for above 700 units has been fixed at Rs 16.50 per unit.
Besides this raise consumers have also to pay 16 per cent General Sales Tax (GST) which is one of the major sources of income for the federal government. For sanctioned load 5 kW and above- Time of Use (ToU) meters during peak hours' electricity rates have been fixed at Rs 15.50 per unit and for off-peak hours Rs 9.10 per unit.
Country's inter circular debt has touched Rs 700 billion due to sustained failure of the policymakers and executives, who are getting hefty salaries and other perks in Planning Division, Water and Power Ministry and Finance Division, to eliminate it.
A couple of years ago Rs 301 billion were transferred to the books of Power Holding Company Limited (PHCL). Last week, the government also decided to transfer Rs 160 billion more to PHCL from Discos books.
The sources said the government policy makers in the Planning Commission, Water and Power Ministry and Pakistan Electric Power Company (Pepco) discussed the idea that electricity tariff should be taken to a level where poor and middle class people should reduce consumption on several occasions.
The first of this kind of proposal had been floated by Ismail Qureshi, as Secretary Water and Power, which was supported by Pepco and Planning Commission. Qureshi is now facing National Accountability Bureau (NAB) for appointing Adnan Khawaja as Managing Director OGDCL on verbal instructions of Prime Minister Syed Yousaf Raza Gilani.
Electrification process of far flung areas is however in progress through different politically motivated schemes for the domestic consumers, while inadequate supply is responsible for industry shutting down.
"Yesterday Pepco hardly managed to generate 8600 MW against the demand of 12000 MW due to which massive load shedding was witnessed," said another official.
China had also imposed punitive power prices on business that crossed limits in Zhejiang province, a manufacturing hub bordering Shanghai, to curb demand during an expected electricity supply shortfall in summer.
An official told Business Recorder that rationing of electricity is more beneficial proposal compared to existing load suppression model. Elaborating on the proposal, the official stated that if a consumer is using 200 units per month for the last two years, he should be asked to bring consumption level to 180 units per month through compelling him to pay a hefty tariff for above 180 units consumed.
In 2010-11 the federal government had earmarked Rs 84 billion for subsidy to Wapda/ Pepco which was later revised to Rs 296 billion. For inter-Disco tariff differential Rs 30 billion were allocated in 2010-11 which was increased to Rs 239 billion for non-economic political considerations. For 2011-12, an amount of Rs 50 billion has been allocated for this fiscal year and it is not known how much the amount of subsidy will be further increased.
Power sector analysts maintain that the amount of inter-Disco tariff differential is basically being used to extend relief to those companies, which are inefficient in terms of system losses as well as recovery of bills. A senior official of Water and Power Ministry has confirmed that Hesco, Qesco, Sesco, Pesco and Mepco are at the top of the list of mismanaged companies, but due to political considerations actions is not being taken against them
Recently, Minister for Water and Power, Syed Naveed Qamar said that there is no possibility of differential tariffs in the country.
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