Ministers miffed at rising utility prices

Say hike in gas, power tariffs sabotage govt efforts to fix inherent flaws in economy

ISLAMABAD: Some cabinet members have voiced serious reservations over the unabated upward trend in electricity and gas tariffs despite a multi billion-rupee government subsidy to keep the prices in check, The Express Tribune has learnt.

The ministers believe that the persistent rise in utility prices was stymieing government’s efforts to rectify the inherent flaws in the economy inherited from the predecessors.

This transpired in the minutes of the federal cabinet’s meeting which was convened by Prime Minister Imran Khan on Tuesday. A copy of the document is available with The Express Tribune.

According to the ministers, the government subsidy – a whopping Rs216 billion – was ostensibly not being passed on to the consumers as power and gas tariffs continue to rise. They said the gas prices had to be brought down through revision of billing slabs, but even that didn’t result in anything tangible.

About the Rs216 billion subsidy, energy ministry officials explained that it was tariff differential subsidy (TDS) to keep tariffs uniform for all power distribution companies (Discos) in the country.

They, however, added that fuel price adjustments were linked with international fuel prices where the government has no control. “Since there is a lag of around three months, the effect of increase in international fuel prices during the summer was reflected in autumn,” the document quoted them as explaining.

Nonetheless the government has ensured that lifeline power users who consume up to 300 units a month are protected and spared any hike in power tariffs, the officials said. These consumers make up 75% of all electricity users.

The officials claimed that “tremendous headway” had been made in curtailing overbilling, power theft, and corruption.

They said the ministry has also announced an “incentive package” for power supply at a flat rate of 11.97 which will be applicable from Nov to Feb. It is likely to help the industry to boost output by increasing the working shifts which, in turn, would create job opportunities.

One minister called for an upgrade of the transmission system while referring to power outages in the areas falling in the jurisdiction of the Peshawar Electric Supply Company.

About the gas tariff, it was informed that in the past consumers were not being given the benefit of lower slab if the consumption exceeded the upper limit of that slab. The billing mechanism has now been revised to allow the benefit of one preceding slab to the domestic consumers.

The cabinet was also informed that a forensic audit has confirmed inflated billing to a number of consumers who would have to be refunded the over-charged amount, but the reimbursements have been held up “for the time being” due to litigation.