Senior Vice Chairman of Ferozepur Road Industrial Association Lahore (FRIA) and PIAF leader Shahbaz Aslam has opposed the Power distribution companies (DISCOs) fresh demand of putting a burden of another Rs82 billion on consumers by raising electricity tariff for the second quarter of current fiscal year amidst already highest energy rates in the region. While describing the government’s decision to increase electricity tariff further as harmful for the trade and industry, as the businesses were already under financial stress, the FRIA leader urged the government to reverse the proposed jump in power charges. Shahbaz Aslam urged the power ministry to identify system constraints and communicate targets to all concerned departments in order to launch a wartime effort to upgrade the transmission system. He said that it was unfortunate that the National Electric Power Regulatory Authority was all set to accord final approval for massive raise in electricity base rates upto Rs7.50 per unit (27 percent) for industry, commercial sector, agriculture tube-wells, AJK, public lighting and other categories of consumers, who will now have to face the brunt of Rs7.50 per unit.

The SVC FRIA said that the average sale rate would reach now Rs28.36 per unit from Rs22.59 per unit, posting an increase of Rs5.76 per unit of which variable charges are Rs27.65 per unit - from Rs21.90 per unit with an increase of Rs5.75 per unit and fixed charges of Rs0.01 per unit - to Rs0.70 per unit from Rs0.69 per unit, as the government intends to earn Rs477 billion though this rebasing. Shahbaz Aslam said that the increase in base rate of electricity was also part of pact signed between government and International Monetary Fund (IMF), which says that the government has to notify NEPRA’s determinations without any delay and amendment. The regulator was scheduled to hold a public hearing on Monday just as an eye wash, on Motion of Leave of Federal government submitted by the Power Division for adjustment in tariffs of Discos and K-Electric, already approved by the Federal Cabinet through circulation. The rate of one unit of electricity for those consumers who will use over 300 units in a month will touch Rs55.52 per unit after inclusion of FCAs, taxes and surcharges, whereas for some categories it will be over Rs60 per unit.

Earlier, the NEPRA had approved average rebasing in tariff of Rs4.96 per unit across the board but the government, after intensive consultation, decided to pass more financial impact of proposed increase to unprotected domestic consumers and other categories through cross subsidisation to protected category of domestic consumers and adjustment of Rs148 billion subsidy. The SVC FRIA argued that this was a big blow to electricity-heavy industries, if not passed on to the consumers. It could also affect the businesses, who were reliant on grid. Roughly this could mean over Rs50/bag impact if their goods were produced using grid. He said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector. Shahbaz Aslam said that the high cost of doing business has proved to be dangerous for Pakistan’s industry, discouraging investment both in capacity and capability, calling for lessening the burden of heavy taxes on the power sector.

Credit: Independent News Pakistan (INP)