Even though the law ministry and the National Electric Power Regulatory Authority have cleared the summary and okayed the increase in tariff, the PML-N govt wishes to absorb the impact. PHOTO: FILE
ISLAMABAD:
The PML-N government is working on a plan in order to withhold a tariff increase of Rs2.61 per unit, meant to be passed on to end users by the power regulating authority, which may result in it providing an additional subsidy of Rs200 billion to consumers.
Power distribution companies had filed petitions with the National Electric Power Regulatory Authority (Nepra) in June last year to seek an upward revision of the tariff, while claiming higher operational costs for the ongoing financial year. But Nepra, on the insistence of government officials who feared a political backlash, had not taken a decision on the matter until the PPP government completed its tenure.
Sources told The Express Tribune that the Ministry of Law and Nepra have now cleared the summary and okayed a Rs 2.61per unit increase in the power tariff in order to recover the revenue shortfall faced by power distribution companies in the ongoing financial year.
It should be recalled that the PPP government had raised the tariff by 16% in 2011-12, and again by 22% in 2010-11.
Breaking with the trend for election year, the PPP government froze the power tariff for the ongoing financial year, leaving a decision in this regard for the new government.
“After the revision, the power price will go up to Rs14.50 per unit from the existing Rs11.89 per unit, leading to a price differential claim of Rs5.63 per unit,” a government official said. The government is already paying Rs3.02 on every unit in subsidy to end users, as it charges only Rs8.87 for every unit of electricity sold.
But sources said the power ministry would not increase the tariff for customers, and the total power subsidy would go up as a result, forcing the PML-N government to release an additional Rs200 billion to settle tariff differential claims.
This year, the government had already projected that the power subsidy will actually clock in at Rs350 billion, against the original target of Rs185 billion. But our sources maintained that circular debt would not exceed Rs500 billion even if the price hike was not passed on to consumers. Officials said that out of the total debt, Rs200 billion would be settled by adjusting the receivables and payables of energy companies. Therefore, the government would instead have to come up with only Rs300 billion, which they said it will pay in three instalments.
Every month, over Rs30 billion is added to the national circular debt on account of transmission and distribution losses, lower collections, late payment surcharges to independent power producers and loss of fuel adjustment surcharge.
Private sector defaulters, who have to pay billions of rupees in dues, are still receiving electricity without having paid a penalty. Finding itself helpless in this regard, the past government had involved the National Accountability Bureau in a drive to recover Rs100 billion from such defaulters, who total around 234,000.
Published in The Express Tribune, June 27th, 2013.
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@Jonaid:
You're missing the point. Within the Pakistani context, there isn't enough electricity to go around for everybody. That makes it a luxury and a precious resource. Clearly electricity is essential for some sectors such as industry and agriculture. But surely civic society can live without electricity, as unpleasant as that would be. Given the mess that we are in, until such a time that we can overcome these issues, why not allocate resources to where they are needed most? Looking at the government to subsidize your energy consumption is NOT the way forward.
@Truth Hurts: Bro. I am regulating my use of electricity. I am only using it 12 hours out of every 24 hours. Then again...it is only available 12 hours a day in my part of lahore.
@Truth Hurts: If exlectricity is an absolute luxury then you must have an alternate for tubwells, Lathe and Milling Machines, Knitting Machines, Power Looms etc. If you are living in a specific environment where these things not matter it dosn't mean that everyone else is on the same page.
@tr: Perhaps you can turn off your AC. Use two lights at night instead 6-7 and do some savings. The tariff rates are pretty lucrative up til 100 units.
@tr:
If you're struggling to pay your electricity bills, the easy solution to your problem is simply not to use as much. Perhaps spend less time online? But that wouldn't be very Pakistani of us. We are genetically coded with a sense of entitlement. Not only do we demand we be given luxuries, we want somebody else to pay for it too.
And yes, electricity is an absolute luxury!
Ridiculous headline. It is the Government of Pakistan that has to absorb this 200bn & not the PML-N.
And where is this money magically going to come from. More borrowing of course. Stupid, stupid, populist policies.
So the new govt. is as spineless as the old one. They need to grow a backbone and pass on the true cost of electricity.
One of the core reasons that PPP could not win the general election on May 11, 2023 to make the government another time was that PPP passes all sorts of inflation to the end users, whether it was related to electricity tariff or some other kind of inflation.
Mian Sahib has done the right thing. The poor and middle class people cannot afford to pay any more inflation to any one, until and unless their income will increase.
@S: Lol did you see the budget. Enjoy the Maturity.
May Allah be with you Mian sahab.. Aameen!
Give credit to NS , his government is showing alot of effort and maturity, lets see how long it lasts... on the other hand sadly in KPK its the opposite so far... pti needs time to mature...
Even a child knows from where those 200 billions will come..it will again come from our pockets..the poor of Pakistan..in the name of mobile jaggga tax...general sales tax....Why I can see only praise for nooon and news against PTI very often on express group...be it English or urdu paper or there TV channel..it is really becoming evident..