Electricity bills: No plan to raise tariff, says Qamar

Naveed Qamar has denied plans to raise the power tariff by 6% under a Nepra proposal.


Express July 23, 2011

HYDERABAD:


Federal Minister for Water and Power Naveed Qamar has denied plans to raise the power tariff by six percent under a National Electricity and Power Regulatory Authority (Nepra) proposal.


“I don’t understand who spreads such rumours. Nepra only a few days back announced a 61 paisa per unit increase,” he said on Saturday at a ceremony hosted by journalists at the Hyderabad Press Club.

He said that outstanding dues, though still very high, have been reduced to Rs140 billion this year from Rs250 billion the year before. “Pakistan Electric Power Company (Pepco) has directed the chief executives of all the power distribution companies to ensure maximum recovery even if it means disconnecting power supply to government departments.”

He contended that the amount for subsidy is paid from taxes, deficit financing and by printing excess currency notes. “Eventually that subsidy is paid by the ordinary people who should indeed be paying their bills.” The federal budget 2011-12 allocated Rs 147 billion for energy sector subsidy, a 57 percent reduction from Rs343 billion a year before.

He said that the prevailing situation of power outages will persist in the country unless new projects of renewable and coal energy begin production. “For now we have been managing the demand and supply within our existing production capacity.”

Explaining the government’s policy towards meeting the power shortages, he said that while new thermal projects are being disallowed, many oil-based plants are being converted to coal.

He denied that Pepco has reduced power supply to Karachi Electric Supply Company (KESC). “The problem with KESC is not just about shortage of energy production but it is the ongoing tussle between the management and workers which is having a retrograde effect.”





Published in The Express Tribune, July 24th, 2011.

COMMENTS (2)

MAHFOOZ UR RAHMAN | 10 years ago | Reply

I DONT TRUST THE GOVERNMENT , OR ANY GOVERNMENT FOR THAT MATTER. FOR A VERY LONG TIME , THE PEOPLE OF PAKISTAN HAVE TAKEN FOR A RIDE

Meekal Ahmed | 10 years ago | Reply

Oh, this is great Mr Minister. If there is no plan for a pass-through and you are buying oil at $100/bbl and selling it for $85/bbl, where is the differential going?

Into thin air?

It is going on the budget. To finance that, you have to either raise taxes, or reduce spending. You can do neither.

So, you print more money to fill the gap which should be easy now that Mr Kardar has resigned in disgust. That will cause more inflation and more economic distress and instability.

Inflation, as they say, is the cruelest tax since it affects the poor the most.

Pass it through but use compensating transfers to protect the poor. That is not rocket science, for God's sake!

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