The Pakistan Electric Power Company (Pepco) is reportedly charging 25 percent higher tariff from agriculture consumers for the last several months, on verbal instructions from Finance Ministry, official sources told Business Recorder.
Giving the background of this strange case, sources said that the Ministry of Finance in its Office Memorandum (OM) issued on June 28, 2007 had informed the Ministry of Water and Power that the Cabinet in its special meeting on June 9, 2007 had decided that 25 percent subsidy on electricity charges in the use of agriculture tube wells approved to boost agriculture production will be shared equally between the federal and provincial governments. The Finance Ministry, therefore, directed the Ministry of Water and Power to implement the Cabinet decision.
The matter (withdrawal of 25 percent subsidy) was subsequently reviewed by the Ministry of Finance in consultation with the Ministry of Water and Power, which was shared by the federal government and the provincial governments on 50:50 basis ie (12.5 each) has been withdrawn in the current year ie 2010-11 budget. However, no formal directions in this regard have yet been issued by the Ministry of Finance, sources added.
They said that Pepco has already started implementation of this decision as per verbal instructions given by the Ministry of Finance in various meetings held with reference to Pepco Business Plan for the year 2010-11. Pepco has requested that the matter may be taken up with Finance Division to convey the latest decision formally to the Ministry of Water and Power/ Pepco, sources added.
On November 17, 2009, the Economic Co-ordination Committee (ECC) of the Cabinet had directed the Ministry of Water and Power to ensure submission of the summary regarding ''subsidy policy for agriculture tube-wells'' in the next ECC meeting. It was also directed that the summary should contain proposals/recommendations to address non-payment of bills by Balochistan farmers operating tube wells without payment of electricity bills.
According to sources, the Ministry of Water and Power recently told the ECC that all kinds of subsidies were being eliminated following the policy of the federal government. It was further stated that a draft summary for the Cabinet has been prepared and circulated to all stakeholders ie Finance Division, Minfa and provincial governments, for comments. The ECC, sources said, directed the Ministry of Water and Power to ensure submission of summary to the Cabinet in its forthcoming meeting.