Cut in Aug, Sept power bills proposed

Khalid Mustafa & Mehtab Haider & Muhammad Anis
Tuesday, Aug 29, 2023

ISLAMABAD/ PESHAWAR: Top officials of power and financial divisions have tailored some suggestions for immediate relief to masses in the electricity bills, which are to be placed before the federal cabinet meeting on Tuesday (today) with Caretaker Prime Minister Anwaarul Haq Kakar in the chair.

All officials are tight-lipped but some insiders told The News that one of the suggestions was that the government might reduce some portion of the electricity bills of August and September to provide some immediate relief, but the impact of the reduced portion would be passed on to consumers in the six winter months, in a staggered manner.

The government has already decided not to pass on the impact of the last quarterly adjustment tariff of FY23, which is Rs5.40 per unit in the next three months, instead, it has decided that the increase would be passed on to consumers in six winter months, from October 2023 to March 2024, in a staggered manner to reduce the price shock, and this is how the Rs5.40 per unit would reduce to Rs2.31 per unit in the tariff in the winter season.

The impact of Rs1.24 per unit of the third quarter of FY23 would end in September 2023. In the winter season, electricity consumption goes down to just 10-12kMW, owing to which the electricity bills would tumble. So the government has decided to pass some part of the inflated bills of August and September to consumers in six months of the winter season. However, there are some suggestions that 30-35 per cent of the electricity bills should be reduced from the electricity bills, which would be passed on to consumers in the winter season in a staggered manner.

As far as deduction of taxes of general sales tax (GST), with-holding tax (WHT) and surcharges from electricity bills is concerned, the finance ministry would have to take the IMF on board. However, the official said that the IMF might not give its nod for compromise on the tax revenue generation target, which is Rs9.2 trillion; therefore, there seemed no relief in the form of reduction in GST and WHT taxes.

Meanwhile, the federal cabinet ascertained startling disclosure that the average power tariff has gone up by Rs14 per unit, jacking it up from Rs35 to Rs49 per unit through annual rebasing, which the government has collected through electricity bills in August 2023.

The Ministry of Power informed the cabinet that the exchange rate of Rs286 against the US dollar was used to determine the base tariff for the current fiscal year, compared to much less for the last financial year. It left the government with no option but to raise the Annual Rebasing (AR) tariff to the tune of Rs7 per unit.

Now the federal cabinet, which is scheduled to meet on Tuesday (today) with Caretaker PM in the chair, would have two options: either to abolish the Annual Rebasing collection of Rs14/unit, collected through August 2023 electricity bills, or collect it in shape of staggered manner. There is a proposal to collect Rs2/unit during the next six-month period of the current fiscal year. There is no possibility of any relief in taxes including GST and WHT at a time when the country is under the IMF programme.

During a scrutiny, the cabinet came out with a disclosure that the National Electric Power Regulatory Authority (NEPRA) determined an AR tariff of Rs7 per unit, but the previous government made it effective in July 2023. The Ministry of Power could not recover Rs7 per unit Annual Rebasing of tariff in July 2023. The AR tariff was implemented in August 2023, so the electricity bills tariff went up by Rs14 per unit in one go. Thus, the average tariff has gone up from Rs35 to Rs49 per unit with effect from August 2023, and such a massive hike in power bill caused hue and cry all across the country.

The official said that Pakistan’s power sector was witnessing the monster of capacity charges, which was standing around Rs18 per unit. The capacity charges turned from Rs1.3 to Rs1.6 trillion and there is a need to bring it down through utilisation of incremental package for industries. This average tariff on account of capacity payment needs to bring it down from Rs18 to Rs6 per unit in order to align it with the best international practices.

“Without tackling the capacity charges issues, the cash bleeding power sector cannot be fixed,” said the official.

When this scribe contacted the top guns of power sector to ask about adoption of conservation plan to reduce utilisation, they replied that the capacity charges would not reduce with the help of conservation strategy. There is need to adopt multipronged strategy including revising the agreements with IPPs in order to reduce the capacity charges. So far the Ministry of Power had struck revised agreements with certain IPPs, but it resulted in reduction of just Rs0.85 per unit. However, there are certain power producers including CPEC related power projects and some others where there was no revision in tariffs, so there is need to find out amicable solutions on permanent basis.

Caretaker Minister for Information and Broadcasting Murtaza Solangi Monday said on social media website ‘X’ that a high-level meeting, which was held at Power Division on Monday, finalised proposals with regard to electricity bills. Solangi said the meeting finalised proposals for the federal cabinet, which was the only forum to take such crucial decisions and give approvals. “Therefore, it has been decided that proposals and decisions will be presented at the federal cabinet to seek its approval and implement the same,” the minister said.

Sources said the follow-up of Sunday’s first round was also held at the Prime Minister’s House on Monday. However, Kakar could not chair the meeting due to other pressing engagements. The meeting was attended by some federal ministers, advisors and senior officials. The sources said during both meetings, the participants agreed that it was the IMF agreement which was a hurdle in providing relief to the electricity consumers. Various proposals to provide temporary or permanent relief to the electricity consumers came under discussion.

Meanwhile, the Markazi Tanzeem-e-Tajran Pakistan has given call for countrywide protest demonstrations on August 29 (Tuesday) against sky-rocketing inflation, increase in electricity tariffs and price of petroleum products.

In a statement on Monday, President of Markazi Tanzeem-e-Tajran Pakistan Muhammad Kashif Chaudhry said there would protests from Khyber to Karachi today against brutal acts which are targetting all from a common man to the traders’ community. He said that where inflation and increase in prices petroleum products and electricity tariffs hit the common man, such unjust measures have rendered the traders community as mentally sick.

He regretted that despite strong protests across the country and rejection in increase in electricity tariffs and prices of petroleum products, the government has not been able to announce any relief measures so far. “We will take every possible step to force the government withdraw unjust economic and financial measure,” he said.

Kashif Chaudhry further announced that the traders’ community would also join the shutter-down strike on September 02 (Saturday). He also demanded of Chief of Army Staff (COAS) General Asim Munir to intervene so that economic policies are implemented while taking care of hardship being faced by people. “The caretaker government instead of taking care of common men is further adding to their problems” he said.

Meanwhile, the traders’ organisations of the provincial metropolis have announced to join the Jamaat-e-Islami called shutter down strike and countrywide protests against the cruel increase in electricity prices and unaffordable bills.

The announcement was made at a crowded press conference at the historic Chowk-e-Yadgar here on Monday. The press conference was jointly addressed by JI district chief Bahrullah Khan, President Sarafa Bazar Sher Farzand and other leaders of trader bodies.

Speaking on the occasion, Bahrullah Khan said that provision the free units to all government entities including Wapda officials, judges, generals and others should be stopped as their bills were being received from the poor people.

He stressed that announcements should be made from all the mosques in the province to ask people not to deposit their electric bills. He said that the Wapda officials should not be allowed to cut power supply to anyone.

Bahrullah Khan said that the previous governments were responsible for the unbearable increase in the prices of electricity. He said that the people were fed up with the excessive hike in the prices of daily commodities.

They were no more in position to pay for the electricity and other utilities. He said that JI would stage countrywide shutter down and wheel jam strike on September 2 on the call of central chief of the party Sirajul Haq.

Sher Farzand said that the trader organisations would fully participate in the JI shutter down strike. He said that the traders were facing severe insecurity. They were paying every kind of tax but the government was not giving them any facility in return. The government has been unable to take any step for our security let alone other facilities, he said.

Meanwhile, protests against the inflated power bills spiraled on Monday as activists of political parties joined the common citizens in staging demonstrations in the provincial capital and elsewhere in Khyber Pakhtunkhwa.

The Awami National Party (ANP) staged a protest at the Bacha Khan Chowk. ANP senior leader Ghulam Ahmad Bilour and former Member Provincial Assembly Samar Haroon Bilour addressed the protesters.

They asked the government to provide relief to the people as they were grappling with record inflation coupled with joblessness.

A protest was also staged against the high electricity bills outside the Peshawar Development Authority in Hayatabad.

The protesters chanted slogans against the government and power distribution companies. Led by Imran Khan Salarzai, Nawab Khattak, Anwar Zaman and other political and religious leaders, the protesters said that residents of Hayatabad township pay bills regularly and would not accept any unjust taxation in electricity bills.

They warned of launching a civil disobedience movement if the government didn’t stop the practice of collecting unjust taxes in bills. The speakers said the power consumers were unable to pay these bills in their existing salaries or income.

The protesters said that power consumers should not be forced to recover the cost of government misspending. MARDAN: Hundreds of residents staged a protest rally at Bacha Khan Chowk against the increase in the prices of electricity and petroleum products.

The rally was organized by Mayor of Mardan Himayatullah Mayar and President of Mardan Chamber of Commerce and Industry Zahir Shah, Mushtaq Semab and other elders. The participants of the rally chanted slogans against the Peshawar Electric Supply Company and the government.

The speakers condemned the government for the increase in the electricity and petroleum products. They said the government should end the privileges of ministers, judges, bureaucrats and others instead of imposing heavy taxes on the poor people. The protesters said they would not pay the inflated electricity bills.

BATTAGRAM: The people in Battagram district took to the streets against heavy taxes in electricity bills and blocked the Karakoram Highway for traffic for an hour.

Chanting slogans against the government, the protesters burnt used tyres on the road, disrupting the flow of traffic, which caused inconvenience to the passengers using the road.

The protesters torched the electricity bills to vent anger, asking the government to lower the power tariff or else they would not pay the bills.

Addressing the protesters, president of Anjuman-e-Tajiran Battagram Abdul Ghaffar and others said that Battagram was an underdeveloped district where people were facing a host of problems and abject poverty.

They said that rising inflation, unemployment and inflated electricity bills had broken the people’s back. The speakers added the government should take pity on people by withdrawing the taxes from electricity bills or else they would be forced to hold an indefinite shutdown protest.

MANSEHRA: The people staged a demonstration to record protest at the exorbitant power bills. The traders pulled down the shutters to express resentment over the unjustified increase in the power tariff. They said that the government should stop providing free electricity units to Wapda employees.

NOWSHERA: The Anjuman-e-Tajiran staged a protest in Nowshera as a mark of protest against the surge in electricity prices. The traders took out a rally from the Shobra Chowk to the Nowshera cantonment.

Addressing the protesters, the traders asked the government to withdraw the taxes in the electricity bills.

Meanwhile, speaking at a protest rally in Pabbi town here, Awami National Party (ANP) leader Mian Iftikhar Hussain said that the commoners were now unable to arrange a two-time meal for their children in the face of backbreaking inflation.

He said that the price of the electricity unit was one rupee and 30 paisa but the consumers were compelled to pay Rs50 per unit.

The ANP leader said KP produced cheap and surplus hydel electricity but its citizens had to pay far higher power charges. He termed the protest against the power bills civil disobedience.

ABBOTTABAD: Torching the electricity bills in the main square of the city, the business community of Abbottabad has threatened to start a civil disobedience movement against electricity tariff.

The protests were held across the city where the protesters criticized the government and the Water and Power Development Authority for the inflated bills.

They blocked the Karakoram Highway for some time. The business community, traders and civil society members held protests and burnt the electricity bills to give vent to their anger.

The major rally started from Cantonment Plaza under the leadership of All Trade Federation President Saqib Khan.

Addressing the protestors, Saqib Khan said the government had forced them to stage the protests. He said the elite were getting richer while the poor were getting poorer with every passing day.

Other speakers said the people lacked the financial means to pay such heavy bills. They said that indirect taxation had made life miserable for the people.

They demanded the government to stop providing free electricity to Wapda employees, judges, bureaucrats and ministers. The speakers warned of observing a complete shutdown and a protest sit-in in the entire district.