KARACHI: Pakistan Business Forum (PBF) has shown displeasure on a significant increase in the base tariff by Rs7.50 per unit for electricity, dealing a severe blow to middle and lower-middle-class consumers with Time of Use (TOU) metres
PBF urged the federal government to discontinue the facility of free or discounted electricity to government officers including staff of all power distribution companies (Discos). This move will save the national exchequer Rs 10 billion a year.
PBF Chief Organiser and Vice President, Chaudhry Ahmad Jawad said gone are the days of these individuals living like royals. If parliamentarians, businessmen and masses pay electricity bills from their own pockets, then why certain segment of society enjoy the free facility when country is already facing economic crises?
The base tariff has increased by Rs7.50 per unit, resulting in rates of Rs42 per unit during peak hours and Rs36 per unit during off-peak hours. But this is without factoring in monthly fuel price adjustments (FPA), quarterly tariff adjustments (QTA), surcharges, taxes and duties, electricity duty, and PTV fees. With their addition, the Time of Use (TOU) end consumer tariff is estimated to go in the range of a whopping Rs62-65 per unit.
PBF Vice President Jahanara Wattoo said impact of this jump in tariff is not limited to the middle classes; it also affects high-end consumers, commercial consumers, and industrial consumers using 400 units or more per month. These consumers will be burdened with a significant cross-subsidy to compensate for lifeline, protected, and non-protected consumers using electricity up to 400 units. This spike in commercial tariffs will range from Rs35.38 to Rs41.35 per unit, while the industrial consumers’ tariff (B1, B2, B3, and B4) will rise to Rs32-38 per unit, excluding FPA, QTA, taxes, and duties.
Wattoo said after the consistent electricity tariff hike, the cost of industrial production has massively increased which had brought inflation and hit poor people of the country. Also, she added it had been made hard to run businesses and industries after collecting heavy tariffs in power bills.
PBF Ahmad Jawad said: “How businesses will survive in this high cost of tariff. “It’s a simple formula to raise tariff to overcome the circular debt but you can’t ready to curtail line losses”. One must understand it will prove detrimental to the industries due to high cost of doing business and will also open the floodgates of inflation, he said.
In addition to making the electricity bills costlier and unaffordable for the consumers, the hike in base tariff would escalate prices of all household goods being widely used in every household, he added.
However, electricity consumers are already paying an additional amount in the range of Rs4 to Rs6 per unit on account of fuel cost adjustment due to the unprecedented rise in fuel prices in the international market, he added
“Further addition to the base tariff will turn the finished goods uncompetitive in international markets and unaffordable in local markets,” Jahanara said.
PBF officials also stated we understand this tariff is increasing on the recommendations of the IMF SBA, but why not IMF enforced its decision on the government that line losses in discos should be curtailed to zero percent in 6 months time and its a not a uphill task if the will of the state enforced properly.
Copyright Business Recorder, 2023
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