The price of power

The government should have told to the public that how much money its already making from the power sector under seven different taxes and how much it will generate through this new raise.


By Waheed Hussain

After increasing gas prices, the PTI government finally dared to increase the power tariff as well. The Finance Minister along with his two cabinet colleagues Information Minister Fawad Hussain Chaudhry and Power Minister Omer Ayub khan made this announced in a press conference last week in Islamabad. The minister was of the opinion that National Electric Power Regulatory Authority (NEPRA) had demanded 3.82 percent increase in the electricity prices, however, the protecting the masses from the burden of price-hick, Economic Coordination Committee (ECC) and the Federal Cabinet allowed only 1.27 percent increase.

The government should have told to the public that how much money its already making from the power sector under seven different taxes and how much it will generate through this new raise.  Trying to pacify the masses due to the new increase the power minister Omer Ayub promised that his ministry is working to generate Rs 140 billion by reducing power theft, technical losses, and improving recoveries and efficiencies of the power system. He said, “the ministry will make all efforts to recover overdue bills of Rs 900 billion.” The minister said that new increase will not affect the consumer using up to 300 units in a month. Consumers using units between 301-700 will face 10 percent increase, while, consumers using above 700 units will face 15 percent raise. The commercial, agricultural and industrial sectors will be protected through token increase.

The question is that why the PTI government is taking unpopular decisions against its earlier promises, as before coming into power, it had assured that it would not burden the population with new taxes, rather will tax rich and powerful mafias, mostly those, who had never paid taxes and looted the country.

Justifying the present hick in the electricity prices government explains that it is facing 12 to 18 billion dollars’ short fall to run the financial and economic system of the country, as the previous government left a bleeding economy. That’s why the government is struggling to generate sufficient funds from the different resources, including imposing of new taxes and duties, increasing gas and power tariff, loan from international financial institutions (IMF etc.) and the friendly countries.

The Saudi Arabia has already agreed to provide $ 6 billion assistances, $ 3 billion cash and $ 3 billion oil on the differed payment.

The PM is visiting china this week with a hope to get some financial relieve from all-weather friend. The PM has been saying that funds from friendly countries will help government to get limited funds from the International Monetary Fund (IMF) to protect the country from its tough conditionalities.

The government is appreciated for convincing Saudi Government for the timely help, otherwise, when numerous corruption cases and investigations are underway, foreign governments and financial institutions hardly feel comfortable to deal with such states. The Saudi financial assistance is a symbolic indication of reposing trust and confidence in Imran Khan’s government.

We understand that government is in difficult situation and need money from all sides to meet financial requirements, however, the poor and low income segment of society should be protected from any worse “Tabdili” change.

Ministers by misleading the masses saying that any increase in the prices of the energy sector will not affect them, however, It’s ridiculous and absolutely wrong assumption. The simplest example is that the “nan” which was being sold of Rs. 6 few weeks back now is being sold of Rs. 8 and in some cities the price is as high as Rs. 10. Similarly, the prices of daily used items like flour, milk, ghee, cooking oil, pulses, and other grocery items including the vegetables and fruits have also sky-rocketed. A country like Pakistan where the local administration does not supervise the daily rate list, consumers are left to the mercy of business community.

The power minister promised to recover the money of unpaid bills, address the issue of lines and transmission losses, increase the capacity of the power generating plants. We wish him good luck, in the past, various governments claimed and promised in the same manner, but, ultimately masses bore all the financial burden. The new power prices increase is not justified because already the government is squeezing the law-abiding consumers.

I am presenting an electricity bill of a consumer of the month of October 2018, to give an idea, that, how the government is bitterly taxing the citizens.

The total bill of the month was Rs. 10,467.00 with following breakup. Total Units consumed 529, Cost of Units Rs. 6099.83, Fuel Price Adjustment Rs. 1146.05, FC Surcharge Rs. 227.47, TR Surcharge Rs. 1398.17, PTV Fee Rs. 35.00, GST Rs.1313, Neelum-Jhelum Surcharge Rs. 52.90, GST on Fuel Price Adjustment Rs. 195.00. unfortunately, seven different taxes a consumer has to pay in addition to the actual cost of the electricity.

The Units’ consumed bill was only Rs. 6099.83 with Rs. 4500 taxes. With this breakup every consumer is paying around 50 percent taxes on the electricity bills. What is the justification? Why masses have to pay for Jelum-Jehlum, the project which was used for corruption and illegal money making by the previous governments. What is FC and TR surcharges nobody knows? What is this Fuel Price Adjustment and extra GST on it, nobody knows?

I remember in 2016 the then Federal Minister for Petroleum Shahid Khaqan Abaasi who later became the Prime Minister disclosed that his government has generated extra Rs. 150 billion from the gas sector through bills. So one can image how bitterly and brutally the governments suck the blood of the low income citizens, particularly those who already pay their bills.

As far as NEPRA is concerned, partially it is useless body from the consumer’s point of view, it has been observed that the regulator tries to protect the power generating companies’ interests or being influenced by the governments.

Prime Minster and Power Minster are honest and sincere individuals yet the masses expect quick relieve, which is not visible at the moment.