ISLAMABAD: The government is yet to finalise relief in soaring electricity bills to consumers as the International Monetary Fund (IMF) has conveyed its disagreement to the data provided by the federal government.

According to media reports, the government has proposed a relief of Rs 13,000 to consumers whose bills are between the range of Rs 60,000 to Rs 70,000 whereas Rs 3,000 will be for consumers using up to Rs 300 units.

Official documents available with Business Recorder reveal that tariff of lifeline consumers using 50 units has increased to Rs 4.74 per unit, consumers using 51-100 monthly will now pay 9.29 per unit, 1-100 protected, Rs 14.67 per unit, protected 101-200 units, Rs 17.46 per unit, non-protected 01-100, Rs 25.76 per unit, non-protected 101-200 units, Rs 33.52 per unit, 201-300 units, Rs 38.55 per unit, 301-400 units, Rs 45.97 per unit, above 400 units Rs 53.05 per unit. Time of Use (ToU) peak Rs 57.80 per unit and ToU off-peak 50.22 per unit. This includes base rate, QTAs, FCAs, Debt Servicing Surcharge (DSS) and taxes. The cumulative impact of FBR taxes on electricity consumers will be Rs 734 billion.

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Power Division argues that as the rebasing was notified in the last week of July 2023, some adjustment of its application from July 1, 2023, became applicable in the billing month of August 2023.

As a result, domestic and commercial consumers were hit by Rs 7.64 to Rs. 15.0 per unit of tariff increase in the August 2023 bill. Moreover, already applied surcharges, quarterly tariff adjustments, fuel price adjustments and other FBR levied taxes were added to the overall increase in the electricity bills for the consumers across the country.

The caretaker Prime Minister on August 27, 2023 chaired a meeting and directed Power Division to suggest measures for provision of immediate relief to the consumers.

Accordingly, Power Division prepared a proposal for staggering of financial impact of FY 2023-24 rebasing for domestic and commercial consumers. The proposal has estimated cash flow impact of Rs 36.2 billion and this will result in markup implication of Rs 4.5 billion. The proposal has been shared with the IMF through Finance Ministry, and their response is still awaited.

Power sector’s total liability is Rs 3,478 billion plus Distribution Margin of Rs 341 billion whereas revenue including Prior Year Adjustment (PYA) is 2,503 billion plus distribution margin of Rs 431 billion, showing annual gap of Rs 976 billion.

The bifurcation of Rs 976 billion annual gap is as follows: (i) Discos under recovery Rs 263 billion;(ii) loss above NEPRA target Rs 201 billion; (iii) interest charge on IPPs Rs 177 billion; (iv) policy driven tariff differential Rs 451 billion; and (v) prior year FCA, QTA, PYA (117) billion.

Liability of Rs 3,478 billion plus DM of Rs 341 billion is comprised of fixed charges of Rs 2,344 billion and variable charges of Rs 1,134 billion. Of fixed charges of Rs 2,344 billion, share of Capacity Payment Price (CPP) is Rs 2,010 billion, Use of System Charges (UoSC) Rs 158 billion and mark up Rs 177 billion. The projected Circular Debt (CD) flow is Rs 392 billion.

The Power Division has sought fiscal support for flow of Rs 584 billion.

Copyright Business Recorder, 2023