ISLAMABAD: The provinces have sought real time access to data on production of oil, gas and electricity in the country to ascertain their equitable share in consumption and revenue calculation under a transparent and verifiable mechanism.

The federal government has agreed to discuss the issue with the provinces and is calling back to back meetings of the Inter-Provincial Coordination Committee (IPCC) and the Council of Common Interests (CCI) to reach a solution. Also, the provinces have protested over at source adjustment of electricity duty by power distribution companies (Discos) against dues of the provincial government departments.

The coming meetings of the IPCC and CCI would also be discussing payment of net hydel profit (NHP) to the Khyber Pakhtunkhwa and Punjab governments and the policy statement on gas sector reforms, a senior government official told Dawn.

Though federal departments have software to monitor this data, it is not being shared with provinces

He said the provinces had been raising doubts over electricity supply to their consumers through the regional distribution companies. They have complained that there is no mechanism in place on the basis of which the provinces could monitor daily production of electricity at the national level through different sources and plants and how provinces or Discos are allocated electricity supply quota.

“The pre-determined quota is allocated by the federal government to each Disco and Discos carry out load shedding on feeders either on their own will or on the instructions of the ministry of energy,” said a summary, adding that the Centre was repeatedly asked to provide requisite software to provincial energy and power departments reflecting daily electricity production, availability of electricity to each Disco as well as the duration of load shedding on feeders located in provinces.

For example, KP has complained that it has about 13.5 per cent utilisation share in daily national electricity production but it is not being given 13.5pc share, resultantly causing severe outages in its areas. “Pesco is not utilising the amount of electricity allocated by the federal government on various pretexts like line losses, less recovery and system constraints due to dilapidated distribution system to absorb the supplied electricity,” said a formal summary.

Moreover, since the provinces are being given net hydel profit on the basis of units generated from hydropower projects, the provincial governments have no means for appraisal of data for calculating the profit.

They have also demanded that the provincial governments should have the right to allocate electricity from less recovery to high recovery feeders so that the amount of electricity for that province could be fully utilised. This, they said, would result in implementation of Article 161(2) of the Constitution.

Likewise, the provinces are paid royalty on oil and gas production under the Article 161 at the rate of 12.5pc at well head price. In all, the provinces are also entitled to receive revenue on four heads from the Centre relating to oil and gas production and consumption — like gas development surcharge, excise duty on natural gas and royalty on crude and gas, LPG and sales tax.

But there is no mechanism for the provinces to monitor daily production of oil and gas from various fields. Although, the federal government departments have the working software to monitor this data, it is not being shared with the provinces despite repeated request for installation of this software by the provincial energy departments.

On top of that, the provinces have said they are entitled to impose electricity duty on all categories of consumers under the law. They say after collection of electricity duty from the consumers through bills, the distribution companies are legally bound to credit the amount so collected on behalf of the provincial governments to the provincial exchequer under Rule 5(3) of the Electricity Duty Act of 1964 in 60 days. Under Rule 7 of the said act, the Discos can charge 3pc collection charges out of total amount collected.

“In contravention of Rule 5(3), the power companies are deducting at source the amount of electricity duty so collected on the plea of pending electricity bills against provincial government departments while the federal government resorts to deduction of pending electricity charges from the federal transfers to the provinces,” the summary said.

Intriguingly, the unpaid electricity bills are ultimately cleared by the provincial governments but at source deducted amount is never reimbursed to the provincial governments. They said the Discos were deducting electricity duty without any reconciliation of dues, causing loss to provinces.

Published in Dawn, October 9th, 2017