Karachiites may face above Rs24.5bn burden of additional power surcharge

ISLAMABAD: Karachiites should get ready to bear a heavy jolt in the form of ‘additional surcharge’ of Rs 1.52 per unit as the government has initiated the process of imposing additional surcharge of more than approximately Rs 24.5 billion.

On Tuesday, the National Electric Power Regulatory Authority (NEPRA) conducted a public hearing to consider the motion of the federal government with respect to recommendation of consumer end tariff for K-Electric.

The government, through its motion, has requested NEPRA to approve levying an additional charge of Rs 1.52/unit on K-Electric customers. After completing the hearing process, the NEPRA reserved its decision on imposing additional surcharge on Karachiites. However, it (NEPRA) will issue a decision after thoroughly reviewing the data and scrutinizing the documents.  

In the event of approval, there will be a burden of more than Rs 24.5 billion on K-Electric consumers. Similarly, NEPRA will send its decision to the federal government for notification. Furthermore, surcharge will be levied on power consumers of K-Electric after the Federal Government's notification.

Speaking on the occasion, NEPRA official stated that there is a request for recovery in the form of surcharge from K Electric consumers. The surcharge of Rs 1.52 per unit will cover three-year-old collections.

 NEPRA questioned why such old collections were not requested earlier.

 K Electric and consumers were in court, which also led to the delay, Power Division officials said.

According to power division officials, due to Corona, the government had stopped the additional load at that time, adding that an amount of Rs 275 billion was to be recovered from the consumers, which amounts to Rs 17 per unit.

The government had decided to provide subsidies instead of burdening consumers, and it will bear the burden of Rs 250 billion in the form of subsidy, officials said.

However, a burden of only Rs 25 billion will be faced by K-Electric consumers, said power division officials during the NEPRA’s public hearing.

During the hearing, NEPRA Member Rafique Ahmed Shaikh said this is a quarterly adjustment, and why did you name it a surcharge? It should be decided first whether it is a surcharge or in the form of quarterly adjustments, NEPRA Member NEPRA Rafiq Shaikh said.

Power division officials said that recovery of old outstanding dues could lead to a legal debate and therefore, the government has named it power surcharge.

In this application, an increase has also been added for Lifeline consumers, Rafiq Shaikh raised the question.

However, power ministry officials said that the hike would not be applicable to Lifeline customers.

According to the NEPRA Authority, it is also necessary to first clarify that Lifeline should not face this surcharge. And the federal government will be asked again about the correctness of the lifeline category of the consumers and whether it will be applicable to them or not, NEPRA officials said.

Meanwhile, NEPRA took notice of the matter of the collection of heavy taxes, including income tax from the public through electricity bills and decided to hold a separate session regarding the collection of taxes from electricity consumers. It has also been decided that notices will be issued to all participants before the session.

Officials of the power division said that the power division itself does not collect any tax while taxes are collected by the Ministry of Finance, FBR. And, it is better to call the Ministry of Finance, or FBR on this matter. Taxes are being collected from electricity consumers as per rules. How much income tax is to be collected from the user is specified in the Income Tax Act, said Power Division officials.

Upon this, NEPRA Authority asked to submit the details of how many taxes are being collected from electricity consumers and announced that it would hold a separate full session on the matter.

It is pertinent to mention that NEPRA hearing was held under chairmanship of Wasim Mukhtar, while NEPRA Members Rafique Ahmed Shaikh, Engineer Maqsood Anwar Khan, Muthar Niaz Rana, and Amina Ahmed were in attendance.