Rs3.82/unit surcharge approved for power consumers

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet has approved imposition of Rs3.82 per unit surcharge to recover Rs 335 billion from the consumers in fiscal year 2023-24 (against earlier approved Rs 126 billion for March-June 2022-23 ).

Power Division in a summary moved to the ECC meeting presided over by Finance Minister Ishaq Dar stated that the ECC dated 10th February 2023, approved imposition of additional surcharge of Rs 3.39/unit (total surcharge became Rs 3.82/unit) for four months period from Mar-23 to Jun-23.

Further the ECC also approved additional Rs 1/unit for fiscal year 2023-24 (total surcharge for fiscal year 2023-24 becomes Rs 1.43/unit) for the consumer categories as per to cover the mark-up charges of PHL loans not covered through already applicable FC surcharge at the rate of 0.43/unit. The decision was duly ratified by the Cabinet dated 14th February 2023.

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The surcharge of Rs 1.43/unit is expected to yield Rs 126 billion for fiscal year 2023-24 which is not sufficient to meet the power producers’ liabilities. These liabilities are essentially an obligation of the Federal government with respect to payment of electricity services having nexus with the sovereign guarantees.

Non-payment to power producers may result in loss of generation capacity which can lead to increased load shedding. Further, since the payments to the power producers have been secured by sovereign guarantee, issued by government, the power producers shall start calling upon the sovereign guarantees along with the imposition of late payment surcharge.

The Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 empowers the Federal Government to collect surcharges from the consumers for fulfillment of any financial obligation of the Federal government with respect to electric power services, within the bracket of ten percent of the aggregate revenue requirement of all electric power suppliers.

Copyright Business Recorder, 2023