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ISLAMABAD: The federal government is considering imposing projected Fuel Price Adjustment (FPA) of Rs 2.71 per unit on consumers on permanent basis, to be adjusted at the end of each fiscal year after calculating the actual financial impact of fuel.

Testifying before Senate Standing Committee on Power presided over by Senator Saifullah Abro on Monday, Secretary Power, Syed Asif Hyder Shah said that Power Division has submitted this proposal to the Prime Minister Imran Khan, who has stated “let we see whether it should be implemented or not.”

The purpose of this proposal is to charge projected FPA from consumers keeping in view previous year’s fuel prices already calculated by National Electric Power Regulatory Authority (NEPRA).

According to Secretary Power, Ministry of Energy has submitted its proposal, but it would be a political decision, which the government has to take. Minister for Science and Technology, Senator, Shibli Faraz enquired if the Ministry of Energy can establish an account where the recovered amount of projected FPA from consumers is deposited and later on used to bear the shock in prices of fuel in the international market.

Dec tariff hiked by Rs3.10/unit

Secretary Power noted that in case prices remain low against the projected benchmark, a mechanism has to be devised to refund extra amount to the consumers but if prices are higher than projections, the delta will have to be adjusted as subsidy by the Federal Government has already been earmarked at Rs 334 billion as subsidy in the budget 2021-22.

“We will submit two or three scenarios to the Prime Minister and Cabinet to find out a feasible solution of FPA adjustment issue,” Secretary Power added. An official of CPPA-G, also explained different components of electricity bills and FPA to the Committee to remove misconceptions. Representatives of marble industry of KP gave a representation against imposition of Late Payment Surcharge (LPS) by Peshawar Electric Supply Company (Pesco). A lawyer representing Marble industry also accused NEPRA of imposing a tax which is not its domain.

During discussion on this issue, Senator Fida Hussain and Chairman NEPRA, Tauseef H Farooqi locked horns over the word “Authority”. Senator Fida Mohammad argued that Parliament or Senate Committee is the Authority and not Chairman Nepra. This unpleasant scenario continued for a few minutes until Chairman Nepra used right of reply to clarify that he used the word Nepra Authority and did not refer to himself.

Senator Fida Muhammad urged Chairman Standing Committee to ask Chairman Nepra to withdraw the use of the word Authority and Chairman Nepra withdrew the word, which according to him, he did not say, on the instruction of Chairman Standing Committee.

On the issue of Guddu 747 MW combined cycle Thermal Power Plant, Chairman Senate Committee grilled Chief Executive Officer (CEO), Genco Power Holding Company, (GHCL), Muhammad Imran for not completing the inquiry despite a commitment made by Secretary Power to the Committee.

Additional Secretary-1 (Power Division), Musaddiq Ahmed Khan, suggested that the Committee should propose action against CEO, GHCL for not complying with the directions of the Committee. He said Power Division would also initiate action against him.

However, at a later stage, CEO GHCL responded to Additional Secretary indirectly that he has no issue with anyone and someone else may have an issue with him.

According to official statement, the Committee deliberated over numerous issues including the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill, 2021, increase in Fuel Price Adjustment on Electricity Bills with respect to Fata, Pata and Mardan, Restoration of services of SDOs/ROs of Pesco, and merger of same organizations (AEDB & PPIB) working under Power Division and illegal reappointment of CEO, Qesco. In addition to this, the Committee reviewed the implementation status of recommendations made by the Committee. Chairman Committee, Senator Saifullah Abro took serious notice of non-implementations of the committee recommendations.

Reviewing the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment Bill, 2021) introduced by Senator Bahram and Khan Tangi, the Committee was informed that the proposed amendment is related to operational aspects of the utility business. According to the Ministry, regulation and legislation does not include operational level details, which are already in place.

The committee stood firmly against the penalization of innocent citizens who have been paying their dues regularly and said that strictest measures must be taken against those who don’t.

The representative of Law Ministry stressed that according to law, those who pay their bills cannot be treated on the same grounds as non-payers. The committee decided to further discuss the matter in the next Committee meeting.

Deliberating over the plight of Fuel Price Adjustment on Electricity Bills with respect to Fata, Pata and Mardan in particular to small industry owner the Committee was of the view that with regards to Fata and Pata, concessions regarding taxes apply and hence must be ensured in this case.

It was asserted that small industries must also be exempted, since they do not possess necessary cushion in terms of payments. Facilitation could include an easy installment plan. It was decided that three installment plans without surcharge will be paid. Decision regarding surcharge will be taken at a later date.

The Committee was informed that hundreds of Marble units have shut down due to inflated bills. The committee directed CEO Pesco to issue new bills sans Late Payment Surcharge (LPS) to closed units, with three instalments until their issue is sorted out by Nepra as per court orders.

While discussing Restoration of services of SDOs/ROs of Pesco referred to the Committee by Honourable Chairman Senate, the Committee was informed that the matter was being investigated by FIA and NAB; and hence cannot be discussed at this forum.

The Committee stressed the need for submission of details of Departmental action in this regard. Secretary Power further informed that the issue related to signing of agreement with KE will be finalised by March next as both parties have already initialed the agreement

The meeting was attended by Senator Saifullah Sarwar Khan Nyazee, Senator Zeeshan Khanzada, Senator Syed Shibli Faraz, Senator Hafiz Abdul Karim, Senator Bahram and Khan Tangi, Senator Fida Muhammad and senior officers of the Ministry of Power and Nepra.

Copyright Business Recorder, 2022


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