Power bills: backdate recoveries of FAS erodes textile industry viability

Backdate recoveries of Fuel Adjustment Surcharge (FAS) on electricity bills has eroded the viability of export-oriented textile industry, as recovery of cost against the FAS on past and closed transactions is impossible. The textile industry sources said that some 45 power generation companies, supplying electricity to WAPDA, submit invoices for fuel consumption at the end of every month. An average cost of these invoices is passed on to the consumers without due diligence and scrutiny, they added.
It may be noted that the Asian Development Bank (ADB) has already pointed out the phenomenon of tariff overcharging, causing a bungling of about Rs 500 billion as the power producers are utilising 30% of the capacity but charging fuel for the rest of 70% capacity as well.
The industry circles said determination of basic tariff is a lengthy process and takes time before finalisation on quarterly basis. But the average cost for fuel consumption by power producers is calculated separately at the end of every month and added to the electricity bills after a lapse of six months and charged under the head of FAS. It pushes up cost for each unit consumed and calculated already for business deals with foreign buyers in textile industry, they said. According to the industry quarters, each unit of electricity costs Rs 8.50 to the textile industry and a retrospective addition of fuel surcharge to the electricity bills push up the cost further on deals already calculated and finalised with customers. This faulty tariff phenomenon has left the textile industry in lurch on how to avoid losses against transactions already made to international market, they added.