Federal government's power surcharge squeezes middle income earners more than the rich with a levy of a surcharge of Rs 1 per unit under Universal Obligation Fund (UOF) for consumers using 301-700 units while those using over 700 units would only pay 0.50 paisa per unit.
Federal government has reportedly deprived power sector consumers of Rs 5 billion monthly (Rs 60 billion per annum) relief to appease the International Monetary Fund (IMF), it is learnt reliably. The Ministry of Water and Power recently issued two different notifications according to which Rs 29 paisa per unit tariff was increased under the guise of debt servicing surcharge. Finding 29 paisa surcharge insufficient, the government then imposed another surcharge in the name of UOF at Rs 1 per unit on consumers using 301-700 units per month and 50 paisa for consumers over 700 units. The government did not impose UOF on lifeline consumers and those who used up to 300 units.
According to sources, total power generation stood at 90 billion units per annum but the sold units are around 68 billion per annum. With the imposition of 29 paisa per unit debt servicing surcharge, the government expects revenue of Rs 2 billion per month (Rs 24 billion per annum) and around Rs 3 billion per month from UOF. The imposition of UOF was meant to equalise the tariffs approved by the NEPRA for 2013-14 because the government withheld the tariff notifications for almost one year, fearing that implementation of tariff determinations will have a negative impact on the revenue of Discos.
However, a spokesman of Water and Power Ministry insisted that the increase and decrease in tariff is in line with ECC decision of 27th May 2014 and subsequent to NEPRA go ahead for recovery of debt service. He added the surcharge of 29 paisa would be adjusted with a commensurate decrease in PFA.
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