Judiciary steps in: SC asks govt to explain power, fuel price hikes

Bench says govt apparently cannot authorise such tariff increases.

ISLAMABAD:

The Supreme Court questioned the government’s new energy policy, a day after a near 30 per cent increase in power tariffs and 4.2 per cent hike in fuel prices were announced.

A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, has asked the attorney general to explain how the government can increase energy prices, as apparently it is not the authorised body to do so.

The court, while hearing a case on load-shedding on Tuesday, sought the copies of two separate notifications announcing increase in electricity prices. If the notifications were issued unlawfully, we will pass an interim order, the chief justice said.



The first notification was issued by National Electric Power Regulatory Authority (Nepra) on August 5 and the other by the government on Monday. The chief justice observed that the government apparently has no right to regulate petroleum prices.

“[Increasing oil prices] is the exclusive domain of the regulators who have nothing to do with the government policy,” Justice Jawwad observed. At present, nine distribution companies, including a private company, are functioning as regulators.

It observed that energy prices had increased in the country despite a decrease in prices in the international markets.

The court also questioned the price mechanism formula. Nepra Chairman Khawaja Naeem, who is also the brother-in-law of Federal Minister for Water and Power Khawaja Asif, told the court that the recent increase was approved by the government on the basis of Nepra’s August 5 notification.

Khawaja Naeem told the court that petroleum prices will be decreased subsequently from next month. The decrease will not even amount to five paisas, the chief justice retorted.



The Supreme Court wanted to know why the tariffs on domestic use of power were increased as circular debt had reportedly been cleared. He asked the Nepra chief and government officials to ensure the recovery of Rs441 billion electricity arrears instead of shifting burden onto poor consumers.

The chief justice asked the federation’s lawyer to submit a break-up of the influential people who had kept billions of rupees in their pockets as recovery was not made by the government.

Electricity production is still 2,000 megawatts less than the desired figure, the bench added.

Chief Justice Chaudhry said, “This needs to be examined as the tariff should not be increased in such a manner.”

The bench directed officials and the attorney general to address the court on the recent increase today (Wednesday).

Meanwhile, Justice Jawwad said he could only appreciate the diction in the draft energy policy, as there is no vision in it except good vocabulary. The court sought a notification from the attorney general in order to determine whether the government had the authority to issue such a notification in the first place.

In a separate case, the court reprimanded Minister Khawaja Asif for advising the apex court to hear Jamshoro Joint Venture Limited (JJVL) agreement case expeditiously.

Chief Justice Iftikhar Chaudhry pointed out to the minister that the court could proceed with the case in any way.

Justice Jawwad asked the minister why the government had not taking any action against corruption and why should that be the court’s responsibility. The judge asked, “We take up cases with certain limitations but what kind of limitations do you have?”

The bench told Khawaja Asif that it was his government’s responsibility to ensue 101 per cent transparency in all its sectors.

The court accepted Khawaja Asif’s request and ordered the Sui Southern Gas Limited (SSGL) to place on record the original, authentic copy of the JJVL agreement as it was allegedly manipulated. It was reported that JJVL was awarded a gas-processing contract last year at a price that was 150 per cent higher than the market rates. Khawaja Asif said that a fresh bidding is imminent.

The court also asked the company to keep relevant records, particularly the negotiation draft of the agreement, ready.

Meanwhile, Tariq Raheem, the JJVL counsel, requested the court to adjourn the hearing until next week so he could make proper preparation to argue the case. The court accepted his request and adjourned the case to October 8.


Published in The Express Tribune, October 2^nd, 2013.