ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) on Monday gave its nod for increase in basic electricity tariff by Rs 7.50 per unit from July 1, 2023, across-the-country with Chairman’s remarks that it is election year and political decisions are being taken to pass less burden on 68 percent protected consumers.
The Authority comprising NEPRA Chairman Tauseef H Farooqi, Member (Technical), Engr. Rafique Ahmad Shaikh, Member (Licensing), Engr. Maqsood Anwar Khan, Member (Technical & Finance), Mathar Niaz Rana and Member (Law), Amina Ahmed officiated public hearing during which the regulator was also grilled for blindly complying with the government’s decisions.
All Pakistan Textile Mills Association (APTMA), represented by Shahid Sattar, Engineer Tahir Basharat Cheema, KCCI representative Tanveer Barry, Arif Bilwani, Rehan Jawed of Korangi Association, Chief Jamaat-e-Islami, Karachi, Hafiz Naeem-ur-Rehman opposed government’s move for increase in tariff and requested NEPRA to reject it.
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Some of the representatives of consumers argued that the recent decision of government will encourage theft as those consumers who are best pay masters will also opt to steal electricity.
The Power Division’s team headed by Joint Secretary (Power Division) Mehfooz Bhatti defended the government’s decision saying that government’s determined uniform rate is Rs 28.35 per unit versus NEPRA determined rebasing of Rs 4.96 per unit. However, the government has extended subsidy of Rs 158 billion subsidy to consumers as 98 per cent consumers are getting subsidy of which 68 per cent are protected categories.
“We need full cost recovery but the government has approved Rs 158 billion subsidy for domestic consumers,” Bhatti added.
The government has already approved subsidy of Rs 970 billion for electricity consumers. The Chairman NEPRA remarked that government’s decision to protect 68 percent of consumers from effect of rebasing is heroic, saying that those who can pay have been loaded whereas those can’t pay have been protected.
Member (Technical), Engr. Rafique Ahmad Shaikh in his comments queried as to why the Power Division has not made its economic case to justify rise in basic tariff, saying that this is the issue of inefficiencies. He informed the audience that according to his information one Distribution Company is going to be bankrupted because it has no financial resources.
The representatives of textile industry maintained that with increase in tariff, 16 per cent exports are expected to decrease which means more joblessness in the country. “If the Regulator does not look out for the country’s economic interest industry will shut down and this is something we are facing at the moment,” Shahid Sattar Executive Director APTMA said, requesting NEPRA to deliberate rebasing of tariff on economic grounds too and propose to the government to view the move afresh.
He further stated that APTMA is not asking for any subsidy, but NEPRA should note down APTMA’s concerns and convey the government that the decision will shut down industry.
APTMA Advisor, Tahir Basharat Cheema suggested that the government should do away with revenue based load shedding of 3000-5000 MW to reduce capacity payment of power generation companies. He said, when there will be no exports, how will subsidy be given to the domestic consumers. Member (Technical & Finance), Mathar Niaz Rana supported the viewpoint of APTMA and suggested that NEPRA should hold a session with export-oriented industry and find out a mechanism for industry as Power Division does not have the capacity to conduct sensitivity analysis.
The representative of CPPA-G said that government burdens those sectors that can pay and protect those who cannot.
The representative of KCCI, Tanveer Barry said that higher electricity prices devastated the industry, regardless of its size. The competitiveness of industry has been compromised, leading to a sharp slump in exports and the loss of precious foreign revenue.
On the other hand, the lucrative incentives for independent power producers (IPPs) discourage investment in the industry. Industrialists find it more profitable to invest in IPPs rather than in other industry. These 2 factors kick- started the de-industrialization, which is still ongoing.
Higher prices of electricity remain a constant challenge for industry. He said, KCCI rejected proposed increase in electricity prices through re-basing.
The Regulator is likely to issue its decision on government’s motion for Leave on rebasing on Tuesday (July 25) or Wednesday (July 26) so that it could be recovered in July’s bills.
The Power Division has the Cabinet’s approval for rebasing of Rs 7.50 per unit for all categories of consumers except protected domestic consumers using up to 200 units per month.
Copyright Business Recorder, 2023
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