ISLAMABAD: Ministry of Water and Power has reportedly claimed an additional Rs 33.084 billion subsidy for Peshawar Electric Supply Company (Pesco) on account of tariff differential for 22 months from July 2012 to April 2014. Sources in the Finance Ministry said this subsidy has been claimed by Pesco on account of tariff differential as National Electric Power Regulatory Authority (Nepra) had revised its tariff for the period through a notification in October 2014.
An official of Pesco on condition of anonymity confirmed to Business Recorder that the power distribution company has formally written to Water and Power Ministry to get Rs 33 billion released from Finance Division. He added that Pesco got Rs 68.314 billion tariff differential subsidy for July 2012 to April 2014. As the tariff for the period has been revised by the Nepra, the quantum of subsidy on account of tariff differential has also escalated to Rs 101.397 billion. Pesco is claiming Rs 33 billion subsidy differential for the period.
The official added that Pesco has also collected Rs 24 billion Fuel Price Adjustment (FPA) from the electricity consumers of Khyber Pakhtunkhwa (KP) in 10 monthly instalments after Supreme Court suspended Peshawar High Court (PHC) judgement that declared FPA in monthly electricity bills of KP as illegal and without any lawful authority and ordered the distribution company for the FPA collection. Sources said that last instalment of FAC has been received from electricity consumers in the February billing.
Sources in the Finance Ministry said that Rs 139 billion subsidy has already been provided to the power sector in the first five months of the current fiscal year against Rs 179 billion budgeted for the entire fiscal year. This does not include Rs 40 billion provided to the power sector recently. Sources claimed that Finance Ministry has provided an extra Rs 15 billion to the power sector during the recent power crisis in anticipation of a subsidy claim.
They said on average monthly subsidy of Rs 21 billion is being provided to the power sector with Rs 17 billion to Pakistan Electric Power Company (Pepco) and Rs 4 billion to KE. They added that it would be extremely difficult to contain the amount of subsidy below Rs 300 billion mark against the budgeted Rs 179 billion for the current fiscal year. Sources regretted that in spite of the fact that Minister of Water and Power, Finance and Petroleum Power holding meetings to reform the power sector during the last two years there has been no visible improvement and, instead, the situation has further deteriorated. The increase in tariff is also leading to a higher amount of subsidy and this is evident from the revised tariff for Pesco by Nepra, sources said, blaming power sector's woes on the unbundling of power sector and political appointments especially at the top level of distribution companies.