ISLAMABAD - The stakeholders have rejected the continuation of imposition of three different surcharges of Rs107 billion per month on the electricity consumers and said that they are unjustified.

While hearing on the petition of Ministry of Energy, NEPRA xhairman Tariq Sadozai reserved the judgment on the continuation of Rs 107 billion monthly surcharges on electricity consumers. The federal government has submitted a petition, re-determinations of tariff for Discos for the 2015-16, pleading to continue surcharges on electricity consumers. An average of Rs2.35 per unit surcharges on electricity were imposed in 2014 on all the electricity consumers. The three surcharges include tariff rationalisation surcharge, financing cost surcharge and Neelum-Jhelum surcharge. The Neelum Jhelum and financing cost surcharges would remain flat at 10 paisas and 43 paisas per unit, respectively, for all consumers while the tariff rationalisation surcharge, with an average of Rs1.82 per unit, would vary for each consumer category and distribution company based on system losses. The government is currently collecting Rs 7 billion as Neelum Jhelum surcharge, Rs 70 billion as financial cost while Rs 30 billion for tariff rationalisation surcharge.

Since the consumers are already paying the surcharges, therefore the continuation would not increase consumer tariff from the current level however it would deprive them of a tariff reduction.

During hearing, the Anwar Kamal Law Associates and APTMA contested the decision of continuation of surcharges on the consumers and termed it unjustified. “On one hand, NEPRA is reducing the electricity tariff while on the other allowing the continuation of surcharges on the consumers” they argued. It was further argued that the imposition of surcharges would deprive them of a tariff reduction.

Anwar Kamal Law Associates, on the behalf of electricity consumers, said that they didn’t get enough time to study the petition. The power regulator allowed the firm to submit their written reply within six days.

Additional secretary Power Division, Zargham Khan, in his remarks, said surcharges would not increase consumer tariff from the current level. He said besides providing subsidy to the domestic consumers the government is also providing subsidy to the tube wells in AJK, FATA, Balochistan and K-Electric. A total of Rs 220 billion is being provided to different consumers, he added.

Regarding circular debt, he said that it is Rs 540 billion while Rs 480 billion is owed by Power Holding Company on which the government is paying Rs 30 billion interest per month. The interest of Rs 30 billion is being received as a financing cost from the consumers. He said that the power sector is facing scarcity of funds and pleaded the regulator to allow the continuation of all the three surcharges.