Nepra clears phasing out of Rs20bn power subsidies

Published
0

ISLAMABAD: The National Electric Power Regulatory Auth­ority (Nepra) on Monday cleared the government’s Rs20 billion subsidy reduction plan through increase in uniform national electricity rates by up to 95 paisa per unit with effect from Feb 1, saying it was just a post office in the matter.

“Our role is more like a postman,” summarised Nepra chairman Tauseef H. Farooqui while presiding over a public hearing on a tariff petition of the Power Division seeking implementation of ‘Subsidy Reform Plan — Phase II’ by gradually increasing tariff for residential consumers.

Mr Farooqui said Nepra had already determined a fair basket rate of about Rs18.75 per unit and it was purely a political decision of the government as to how it sets an effective rate for various consumer categories through budget subsidy, cross-subsidy among consumers and companies and so on.

Responding to various observations and questions during the hearing, the Nepra chief said it did not have any mandate to change the 8 to 95 paisa per unit increase in tariff decided by the government. He said the public hearing was conducted under a directive of the court which had a few years ago directed the federal government to go back to Nepra for notification once it decides the ratios of subsidy based on the average uniform tariff determined by Nepra. There­fore, this is just a formality, the regulator had already settled the average rate and now the government was reducing subsidy.

Allows up to 95 paisa per unit increase in uniform tariff

He, however, conceded that there were a number of taxes, duties and surcharges over and above the Nepra-determined tariff which significantly increased the overall consumer bills. He said the minimum tax on domestic consumers stood at 21pc and went up to 47pc. He said he had taken up the matter with the finance minister that Nepra was not a revenue collection agency but attracted severe public criticism for such charges which need to be rationalized. Mr Farooqi said the finance minister had promised to look into the matter and find a way out.

The hearing was informed by a Power Division team led by Additional Secretary Mahfooz Bhatti that they had come for the implementation of the second phase of the 3-phased subsidy reform package approved by the cabinet. The phase-1 was already notified by the regulator in October last year.

Published in Dawn, January 25th, 2022

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...
Terror and politics
Updated 29 Sep, 2026

Terror and politics

There is an urgent need to tone down the rhetoric and tackle terrorism as a collective challenge for both the affected provinces and the federation.
Watching the glaciers
29 Sep, 2026

Watching the glaciers

THE latest signs from Pakistan’s mountains are worrying. Suparco says the number of unfrozen glacial lakes it...
Dangerous agenda
29 Sep, 2026

Dangerous agenda

AS the world remains fixated on the US-Iran conflict, elsewhere in the Middle East, Israel is consolidating its grip...