The federal government has stopped implementation of decisions made by the National Power Regulatory Authority (Nepra) regarding change in electricity tariffs during the last four months (November 2010 to February 2011) due to the fuel price variation adjustment formula.
Sources have labelled this as a violation of the Nepra Act, subjecting the public to additional amounts worth billions of rupees. This, however, is helping the government to understate the budget deficit and the amount of subsidies provided.
The federal government has not passed on the benefit of reduction in electricity tariffs to the people, but has promptly passed on any price hikes, resulting in billions of rupees being extracted from the public.
This action of the federal government has benefited power distribution companies, particularly after Nepra reduced the electricity tariff by Rs1.42 per unit as this decision was not implemented.
According to the Nepra Act, Nepra decides increases and decreases in the electricity prices based on applications received from power companies, through the Central Power Purchasing Agency, and sends a copy of the decision to the government for implementation.
Section 34 of the Nepra Act clearly states that if the federal government is not satisfied by any of the Nepra decisions, it may request a review of the decision within 15 days. In case a review is not requested, the tariff determined by Nepra is automatically bound to be implemented.
Published in The Express Tribune, April 6th, 2011.
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