• Govt plans to withdraw power subsidies available to govt officers, Discos employees
• Consumers up in arms, demonstrators countrywide continue to torch power bills

ISLAMABAD: As protests erupt across the country prom­p­ted by inflated electricity bills on the back of a significant increase in the national average tariff, interim Prime Minister Anwaarul Haq Kakar has summoned an emergency meeting today in an apparent bid to chalk up a strategy to placate the angry public.

In a statement shared on ‘X’, formerly Twitter, PM Kakar said, “I have called an emergency meeting at the Prime Minister’s House here on Sunday on the issue of inflated electricity bills.”

The premier will seek briefings from the power division as well as power distribution companies (Discos), to provide ‘maximum relief to consumers’ in this regard. On the other hand, a plan is also devised to withdraw subsidised electricity availed by Discos and government officers in grade 17 and above.

Caretaker Information Minister Murtaza Solangi held a meeting with Power Division Secretary Rashid Mahmood Langrial and discussed the issue of high electricity bills. The minister confirmed to Dawn that the facility of free electricity units to Discos officers would be discontinued as well and the “summary to take back the facility of free electricity to grade 17 and above officers would be presented in the next cabinet meeting”.

The minister was informed that the increase in electricity tariffs “predominantly affected consumers utilising more than 400 units” per month, and the tariff has remained unchanged for 63.5 per cent of domestic consumers.

Consumers up in arms

This claim that the power bills did not impact 63.5pc of the people came in contrast with videos and pictures circulating on social media. ‘ElectricityBills’ remained a top trend on ‘X’, erstwhile Twitter, where the public lambasted the government for exorbitant bills.

A post making rounds on social media claimed that an elderly person jumped off a bridge in Khanna, Islamabad, due to his high electricity bill. However, this could not be independently verified by Dawn.

A video shared by Siasat.pk showed announcements being made from a mosque, asking people not to pay their bills. Some of the viral content included people setting their electricity bills alight, while in some places, Discos employees were reportedly roughed up.

The members of the business and trading communities have also started to lodge their protests against inflated power bills. Apart from demonstrations held on Saturday, they also announced press conferences to be held on Sunday. A perusal of an Iesco power bill revealed that expensive tariffs alone are not responsible for the increase in electricity bills, high taxes also contributed at least 40pc to each bill.

The government charges include “electricity duty, TV fee (Rs35 per bill), general sales tax (GST), GST on fuel price adjustment (FPA), and excise duty on FPA”.

Fortunately, the proposal of the Senate Standing Committee on Information to impose Rs25 in each electricity bill as ‘radio charges’ has not been implemented as of yet.

‘Taxes cannot be lowered’

Experts believe that the taxes and levies on electricity bills cannot be lowered in the short run. Maaz Azam, an analyst at Optimus Capital, said that it was not feasible for the current interim government to reduce or even delay the collection of any tax – especially keeping in view the pressure from the IMF to maintain fiscal balance. He added that it was primarily due to the high base tariff of Rs30 per unit that the electricity bills were inflated.

The report released by the National Electric Power Regulatory Authority (Nepra) highlighted that in the base tariff, Rs23 was regarding Power Purchase Price, and within it, 72 per cent was the capacity payment component, which is the cost of maintaining the power plants operational even when the government was not buying electricity from them.

In July, Nepra while determining the base tariff estimated that inflation in the country would be at 17 per cent while the dollar would be at Rs286 – and both estimates have already been proven wrong.

Analysts fear that there is no solution in sight. Samiullah Tariq, head of research at Pak-Kuwait Investment Company said, “We are in a complicated situation because there had been delays in determining the tariff and making recoveries around 12 months ago; now the key issue is the highly volatile exchange rate.”

As pointed out by the analysts, electricity bills for the month of September can be inflated due to the high base tariff. Public pressure, including street agitations, can be expected in the coming days since the politicians have also joined the bandwagon.

PPP Nafisa Shah called the electricity bills “backbreaking” and “unacceptable” in her message on ‘X’ social media platform. Ironically, most decisions were made during the PDM coalition government, of which the PPP was a part, Ms Shah questioned. “Why should the people of Pakistan suffer for the poor policies of the rulers?”

Recently, the Power Division requested Nepra that the Rs5.40 per unit additional quarterly tariff adjustment (QTA) pending for April-June 2023 should not be implemented in this form.

The officials of the power division requested Nepra that consumers should be charged at a rate of Rs3.55 per unit for six months, instead of Rs5.40 per unit for three months, to reduce the price shock on consumers still struggling to absorb 26pc increase in base tariff notified in July. However, Samiullah Tariq said that the only solution in the midterm and long term was to “unbundle the electricity and gas utility companies and privatise them without any political or other interferences”.

Published in Dawn, August 27th, 2023