ISLAMABAD - Water and Power Ministry has formally sought 15-20 per cent increase in electricity price from National Electric Power Regulatory Authority (Nepra) in a desperate bid to fetch multi billions from hard-pressed consumers under the head fuel adjustment.

While acting upon the suggestions as well as instructions of the international financial institutions (IFIs) particularly the International Monetary Fund (IMF), the government has decided to reduce the power subsidies. Therefore, rubbing salt on the wounds of overburdened consumers already facing long hours unscheduled loadshedding coupled with sky rocketing per unit price of electricity in the country, the Power Ministry has left no stone unturned to make electricity more expensive.

Available documents with TheNation reveal that power ministry has asked the authority to maintain the reference fuel cost of previous year while setting the fuel cost of the current year ostensibly in a desperate bid to spare the federal government from paying extra subsidy of Rs345 billion which the finance ministry has already declined to provide.

Documents further point out that following the approval of Secretary Water and Power Imtiaz Qazi, Power Ministry has advised Nepra to approve the said annual tariff of DISCOs (electricity distributing companies of the country) on the basis of current year’s annual business plan for distribution companies, approved earlier by the ministry in August 2011. Furthermore, Water and Power Ministry in its request has asked the Nepra to approve this decision of the ministry as a policy decision of the Federal Government. Well-informed sources told this scribe that Power Ministry has written a letter to the regulatory authority seeking its approval which, according to the Nepra Act, is bound to accept the policy decision of the Federal Government. Federal Government had allocated Rs 50 billion as a subsidy for power sector in current financial year (FY 2011-12) budget.

They said that already sky-high electricity generation cost will witness further surge during the current financial year and the Federal Government will be unable to pass it on to the consumers. Consequently, due to surge in generation cost of electricity, it would be impossible to maintain subsidy at Rs 50 billion. Similarly, viewing the political and legal problems, Power Ministry is unable to make electricity more expensive. They said that Nepra, while maintaining the reference fuel cost of previous year, would approve a raise of 15-20 per cent per month under the head fuel adjustment mechanism enabling the cash-starved government to maintain the target of Rs50billion subsidy.

It is to note here that as per Nepra Act, the regulatory authority is not authorised to put further burden on the consumers in the name of reduction in subsidy. It merits mentioning here that Nepra had burdened the weaker consumers hiking electricity prices in July, August and September last year raising Rs77 billion for the government.