ISLAMABAD: The payables and receivables of the power sector continue to rise despite a phenomenal surge in electricity costs to consumers because of imposition of various surcharges.

According to a report submitted to the government, the Pakistan State Oil has reported that it supplied fuel oil worth over Rs800 billion to the power sector between July 2013 to July 31, 2015, but it was paid Rs705bn, leaving a circular build-up of about Rs95bn.

This happened despite the fact that the Ministry of Water and Power had in­­creased the proportion of payments for supplies over the past six months. For example, the ministry paid Rs20.5bn to PSO in July 2015 for fuel supplies of Rs21.6bn, accounting for over 75pc. In contrast, the PSO supplied Rs44bn worth of fuel to power generation companies and was paid Rs36bn in July 2013.

The overall receivables of the PSO amounted to Rs252.4bn on July 31 this year against Rs237bn on Nov 15, showing an increase of about 6.5 per cent. These receivables stood at Rs220bn at the end of May 2013 when the government had wiped out the circular debt in a historic Rs480bn settlement.

The PSO said the public sector power companies owed Rs110bn on Oct 31 last year, but the outstanding dues increased in about nine months by about 14pc to Rs125bn.

The overall recovery position of the power sector itself is also quite grim. The receivables have increased to about Rs635bn as of June 30, according to details provided to the ministry by distribution companies.

The outstanding receivables of the power sector stood at Rs513bn on the same day last year.

This is despite the fact that government has included a number of inefficiencies including theft, technical losses and non-recovery to the billed amount into the consumer-end power tariff as surcharges in the name of equalisation, special surcharge, debt-servicing, tariff rationalisation, financing charges, Neelum-Jhelum surcharge and Fuel Adjustment Surcharge.

Last month alone, the government introduced two surcharges of around Rs2.50 per unit when the National Electric Power Regulatory Authority declined to accept a government directive to pass on the costs to honest consumers to meet benchmarks agreed to with the International Monetary Fund.

“What the government has failed to recognise so far is the fact that every increase in power tariff would in fact expand the unrecoverable amount,” said a former managing director of the Pakistan Electric Power Company. He said 1pc loss in the power sector which stood at Rs6bn in 2012 had now gone up to Rs10bn as average tariff increased from Rs8.5 to Rs12.5 per unit.

According to data compiled by the Ministry of Water and Power, the Rs635bn power receivables also included KE’s bills of Rs44bn at the end of July 2015 against Rs28bn on the same date last year.

The receivables of distribution companies under the control of the ministry have increased by about 21pc to about Rs590bn at the end of July 2015 from Rs490bn of the same period last year.

This happened although the receivables of eight distribution companies have posted a healthy increase while two companies showed some improvement in bringing down their receivables.

Faisalabad and Multan electric supply companies were two Discos which were able to reduce their receivables – those of Mepco down to Rs27bn from Rs30.5bn in one year and of Fesco dropped from Rs8bn last year to Rs7.9bn this year.

The receivables of Gujranwala Elec­tric increased from Rs12.3bn to Rs15bn and those of Lahore Electric went up to Rs46bn from Rs43bn. The receivables of Peshawar Electric increased from Rs90bn to Rs102bn and of Quetta Elec­tric increased from Rs108bn to Rs152 bn.

Likewise, the outstanding amounts of Islamabad Electric increased from Rs30bn to Rs40bn and of Hyderabad Elec­­tric increased from Rs47.bn to Rs57.5bn.

Similarly, the outstanding dues of Sukkur Electric surged from Rs77bn to Rs93bn while Tribal Electric’s receivables rose from Rs44bn to Rs48bn in one year.

Published in Dawn, August 10th, 2015

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