Legal shelter: PHC extends stay order against fuel-based surcharges in province

Seeks details of CCI meetings to see if this issue has been raised earlier.

PESHAWAR:

The Peshawar High Court (PHC) on Tuesday extended the stay order for the collection of fuel adjustment surcharges in monthly electricity bills in the province till November 28. The court also sought details from the advocate general if the matter had been properly raised at Council of Common Interests (CCI) meetings.

PHC Chief Justice Dost Muhammad Khan and Justice Qaiser Rashid issued these orders after the bench was informed a complete record of the matter would be produced before the court in due time.

According to Federal Ministry for Water and Power’s Counsel Advocate Naeem Bukhari, the companies which filed the petition at the PHC are against the National Electric Power Regularity Authority (Nepra) order in which it declared collection of such surcharges legal on December 9, 2011.

Bukhari argued the current writ petition against these charges was not legal because the federal government owns the main power transmission lines and has full authority to fix prices.



The fuel adjustment surcharges are not a tax; if fuel prices go down, other prices will also go down and consumers would receive the full advantage, said Bukhari. If the provincial government wants to give relief to the people then it has to lay transmission lines, and own Peshawar Electric Supply Company (Pesco) and other electricity projects, he contended.

If the collection of fuel-based surcharges is not tax then why was it included in the Finance Bill 2008, pointed out Shumail Ahmad Bhutt, representing the companies which filed the petition. The province produces electricity, but its people do not get any advantage from it, he added. Under the NEPRA Act, it (Nepra) should consult the province whenever it wants to revise prices, said Butt.

“K-P is provided Rs6 billion annually in net profit which is not enough. The burden of varying costs of electricity production, which can reach Rs34 per unit, is also put on the shoulders of its residents. This issue was raised in the last meeting of the CCI but minutes of the meeting are not available,” he said.

The provincial government considers the collection of fuel adjustment surcharges unjust because in addition to the burden of the law and order situation, it receives these huge bills in the shape of surcharges, Advocate General (AG) Abdul Latif Yousafzai complained to the court.

When the bench asked the AG whether the issue was raised with the CCI in the last 15 to 20 years, Yousafzai sought time to produce relevant records.

Attaullah Kundi, counsel for Nepra, told the bench the authority advertises in national newspapers to seek suggestions and the participation of the public to fix new prices. As Khyber-Pakhtunkhwa (K-P) does not have any transmission lines, its prices are fixed by the federal government, argued Kundi.

After hearing arguments from all counsels, the court directed the AG to produce CCI records going back 15 to 20 years to determine whether the issue was raised at their meetings and what, if any, results these meetings begot. The court then extended the stay order against the collection of fuel adjustment surcharges for K-P till November 28.

In February 2012, around 72 industrial units in K-P challenged the collection of fuel adjustment charges in the monthly bills of residents of the province on grounds of exemption. They argued K-P produces electricity and then supplies it to the rest of the country. Since then, the PHC has been extending the stay orders.

Published in The Express Tribune, October 30^th, 2013.