ISLAMABAD: The Senate Standing Committee on Cabinet Secretariat recommended that there is an essential need to review the unholy agreements with Independent Power Producers (IPPs) and the National Electric Power Regulatory Authority (NEPRA) to provide safe and affordable electricity prices to the consumers.
The committee met with Senator Saadia Abbasi in the chair at Parliament House on Wednesday. The committee discussed increasing prices in electricity bills and gas and their impact on the general public.
The committee offered Fateha on the sad demise of Senator Rana Maqbool Ahmed and held his services in high esteem.
Senator Mushtaq Ahmad Khan inquired as to whether or not the power generation license to the IPPs is being provided by the NEPRA. In reply to that, NEPRA Chairman Waseem Mukhtar said the license to IPPs is provided by the government of Pakistan.
Senator Mushtaq Ahmad Khan said, “The energy crisis of the country cannot be resolved without reviewing the unholy agreements with the IPPs and the recent times have proved that NEPRA has failed to provide affordable energy to the local consumers as per their mandate rather only served as a catalyst, protecting the interests of IPPs.”
Senator Saadia Abbasi directed the NEPRA to provide details of fuel price adjustment charges and capacity payments to the IPPs in the year2023.
While briefing the committee, NEPRA Chairman Waseem Mukhtar said that that NEPRA is mandated to provide safe and affordable electricity prices to the consumers and, as of now, consumers have been charged Rs45.06 per unit which includes the taxes mainly as capacity charges, energy charges, and DISCO’s margin.
However, he said that the recent macroeconomic indicators resulted in an increase of Rs3.17 per unit. He further added that the total electricity capacity of the country is around 44,000 MW, and currently, an average of 25,000 to 26,000 MWof electricity is being produced in the country, out of which, a total of 70 per cent is being produced by IPPs.
Furthermore, the committee deliberated on the proposed increase in gas prices and its country-wide utilisation. The officials informed that around 2,900million cubic feet per day(MMcf/day)of natural gas is being produced in the country including 400 MMcf/day from Khyber-Pakhtunkhwa,750 MMcf/day from Balochistan,100 MMcf/day from Punjab, and 1650 MMcf/day from Sindh.
He said that moreover, an average of 28 percent local plus imported gas is being utilised by the power sector,26 percent domestic,18 percent industry, and 22 percent by fertiliser companies.
Senator Saadia Abbasi remarked that fertiliser companies utilise the major portion of cheap natural gas, and yet the local farmers of the country are doomed to buy fertilisers at an inflated rate.
Answering a question, the official stated that gas to the fertiliser companies has been provided at old prices of 302 per MMBtu (Metric Million British Thermal Unit), however, the price of urea bag has been doubled as compared to Rs1,700 per bag in 2020. It was further added that gas prices have not increased since 2020 and a letter has been written to the Petroleum Division for increasing price of gas to ease the circular debt of Rs2 trillion and to meet the gas demands of the upcoming winter season.
The chairperson committee also inquired about the future prospects of the Iran gas pipeline project which has been delayed since a decade. Officials apprised that negotiations on the Iran gas pipeline have been expedited since last year, however, commercial and foreign concerns are the major impediments to the completion of the project.
The committee decided to invite the Attorney General of Pakistan to the next meeting for detailed deliberation on the matter.
Copyright Business Recorder, 2023