ISLAMABAD: The Federal Government on Tuesday “unveiled” its plan to increase electricity tariff by Rs 1.68 per unit for domestic consumers using above 200 units monthly and Rs 1.39 per unit for other categories including agriculture, industrial and commercial consumers.
The tariff increase plan which will be applicable across the country including KE, was discussed threadbare at a public hearing in National Electric Power Regulatory Authority (NEPRA) officiated by Chairman NEPRA, Tauseef H. Farooqi along with Vice Chairman/ Member Sindh, Rafique Ahmad Shaikh, Member Balochistan, Rehmatullah Baloch and Member KP, Maqsood Anwar Khan.
The average increase of Rs 1.39 per unit in base tariff is part of the deal with International Monetary Fund (IMF) and World Bank. With the application of average increase of Rs 1.39 per unit in base tariff of Rs 13.97 per unit, the base tariff will now be Rs 15.36 per unit. The government is projecting revenue of Rs 168 billion from the proposed increase.
Additional Secretary Power Division/ CEO CCPA-G/ Waseem Mukhtar stated that three categories of domestic consumers i.e., 0-50 units, 51-100 units and 101-200 units would be protected through cross subsidization.
Chairman NEPRA argued that it was the domain of Power Division/Federal Government to extend subsidy or not, but as Chairman of the Regulator he believes that the government will have to face backlash for this increase.
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“As custodian of consumers’ interests, I don’t feel a considerable difference in the proposed increase of Rs 1.68 per unit or Rs 1.39 per unit. I honestly think, Power Division should have considered protecting consumers using up to 300 units monthly,” Farooqi added.
He further contended that the regulator cannot force Power Division to review its proposal but as it will have substantial effect on poor people, the Power Division should revisit it and again discuss it with the government as there is a serious risk of backlash. Joint Secretary, Power Division, (Power Finance) Mehfooz Bhatti, said that the proposed increase is part of Rs 3.34 per unit, which the regulator has already declared as fair cost.
However, Chairman NEPRA argued that since consumers using up to 300 units monthly were protected in the past, the Power Division should have considered this.
Naveed of CPPA-G stated that presently the government is still extending subsidy of Rs 168 billion to the consumers despite proposed increase in tariff. The government is still extending subsidy of Rs 3.22 per unit to the domestic consumers which is Rs 135 billion despite increase of Rs 1.68 per unit.
He said, in domestic category (non-ToU), 45 per cent are protected consumers being provided subsidy of Rs 6.53 per unit, the cumulative financial impact of which is Rs 57 billion. The agriculture tube-wells are getting subsidy of Rs7.20 per unit (total 74 billion).
Arirf Bilwani, a consumer representative, Moin Fuda former MD, KSE and senior leader of Jamaat -e-Islami Hafiz Naeem ur-Rehman criticized the government for proposing raise in electricity tariff across the country without improving the power system and promising the nation that no increase will be made in the tariff in future.
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Hafiz Naeem-ur-Rehman also accused NEPRA of safeguarding the interests of government instead of consumers.
Arif Bilwani questioned as to why an army of officials sitting in the Power Division, Finance Division and Planning Division did not calculate the impact of capacity payment and current devaluation accurately which is now being passed on to the consumers; as well as, on those consumers who use more power and are required to cross subsidize lower categories of consumers.
Moin Fuda queried as to why Prime Minister Imran Khan and the Finance Advisor, Shaukat Tarin stated again and again that tariff will not be increased. The officials of Power Division stated that they will answer professional questions and not political remarks as it is not their mandate.
Nepra is likely to announce the decision within two weeks' time, as it will be applicable from November 1, 2021.
Copyright Business Recorder, 2021
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