Businesses oppose imposition of power surcharges

Say such extra cost makes electricity in Pakistan most expensive in region

ISLAMABAD: In a bid to stop the government from including various surcharges in power tariff to cover the cost of line losses, the Islamabad Chamber of Commerce and Industry (ICCI) has strongly opposed the extra burden on consumers.

The government is imposing surcharges to cover the cost of line losses, in addition to debt servicing and interest payments and due to this the electricity charges in Pakistan have become the highest in the region as compared to India, Sri Lanka and Bangladesh.

The ICCI called upon the government to withdraw all such surcharges as well as make sufficient reduction in power tariff, which will facilitate the growth of business and industrial activities, and provide sufficient relief to the common man.

ICCI President Muzzamil Hussain Sabri, in a statement, said the power surcharges accounted for more than 30% of the total charges in a commercial bill and were the major factor in enhancing the cost of doing business in the country.

According to Sabri, instead of bringing drastic reforms in the power sector to cope with the problem of transmission and distribution losses, the government is forcing people to pay for the inefficiency of power companies by imposing surcharges. “This is highly unjustified and in violation of the rights of power consumers.”

ICCI representatives said it was very unfortunate that the Economic Coordination Committee has directed the National Electric Power Regulatory Authority (Nepra) to include interest payment of billions of rupees, owed by the government to the power companies due to late payment, in the power tariffs, though consumers have no role in such late payments.

They added that the government has already included the debt service surcharge of Rs0.30 per unit in October 2014 in addition to tariff increases of Rs0.38 per unit and Rs0.60 per unit under the Universal Obligation Fund to pay the liabilities of power producers.

“Now the government is pressurising Nepra to retain Rs1.50 per unit from the total required reduction of Rs3.20 per unit under the fuel price adjustment and pass on the remaining Rs1.70 reduction to consumers for February, which is deplorable.”

Pakistan is generating 35% of energy from furnace oil, which is costing more than Rs18/unit and it is very difficult for the industry to maintain its competitiveness in a scenario of such high power tariffs, said Sabri.

Published in The Express Tribune, February 1^st, 2015.

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