NATIONAL Power Regulatory Authority (NEPRA) has notified 48 paisa per unit increase in the electricity tariff for the August under the monthly fuel charges adjustment mechanism. It will be charged in the billing month of November from all categories of consumers of DISCOs across the country, except Karachi Electric Company. The tariff increase will put an additional burden of Rs.7 billion on power sector consumers. The trade bodies have demanded for its withdrawal. Skewed priorities for thermal power generation from diesel and furnace oil and payment liability for idle plant capacity agreed under shady deals pushed the electricity tariff to highest level in the region. The exorbitant fuel price and the inflated price agreed in the power purchase agreement landed power sector in the trap of circular debt which is now well over Rs.2.15 trillion.
It is no longer a secret that major contributory factors of swelling power sector circular debt are the accumulating capacity payment arrears and indexation of IPPs electricity tariff with the US dollar, allowed by the previous government. What is mind’s boggling is that why the present government is not revealing the Nitti Gritty of power purchase agreements, the power policies approved by PPP and PML N governments? Why opinion of experts of Company Law and Law of Tort is not being obtained as to whether the agreements between government and local companies or foreign companies can be made for indefinite period and without the proviso of renegotiation? How long the country and its people will remain hostage to agreements which had been made for the protection of vested interest? Power Division claims to have reduced the per month increase in circular debt accumulation to Rs.12 billion. On the contrary, NEPRA has accessed it over 30 billion. The swelling circular debt explains that assessment of regulator is correct. Expensive fossil fuel for thermal power generation, technical losses by the ragtag transmission and distribution system , theft and default of bills and accumulated outstanding dues of local IPPs for the past several years are the major contributory factors of fast piling of this debt, which power division had claimed to be clear by December 2020. On August 14, Prime Minister congratulated the people in a tweet that government has signed MOUs with local private power producers and consequently under the new agreement the cost of electricity will be brought down and circular debt shall be substantially reduced.
