Causing crippling effect


Dec 16 - 22, 2002

Prime Minister Mir Zafarullah Khan Jamali has honored his words to provide relief to the common man reducing power tariff by 12 paisa per unit with immediate effect.

Though it seems merely eyewash in the presence of a large number of levies accompanied by the electricity bills every month, yet people have welcomed the steps because the government has realized the hardships of the people.

It is also said that the downward revision of electricity tariff will not entail any budgetary impact and is a pass through item of 17 per cent fall in international prices of furnace oil. I would like to draw the attention of the government that the power generated through consumption of fuel oil is gradually shifted from oil to gas fired system. A large chunk of KESC power generation has already been switched over to gas and in the days to come entire power generation of KESC has to be shifted on gas under a phased program. Since Natural Gas is purely indigenous and certainly cuts down the cost of power generation, its benefit should also pass on to the people irrespective the wish of the international donors. This is the right of the nation to get benefit of the resources All Mighty Allah has bestowed us.

The opinion leaders from different walks of life however feel that the exorbitant electricity rates is the most disturbing issue not only for the people in general but is also adversely affecting the economic growth in Pakistan. They say that high rate of power theft both in the system of KESC and WAPDA which allegedly reached the level 40 per cent is mainly because of unaffordable rates of the electricity.

The electricity bills give a psychological shock to the consumers when they look at the composition of the electricity bills. For instance, the electricity bill of a domestic consumer with 390 units finds the energy charges at Rs1208.40 paisa but by virtue of different taxes levied the energy charges shoot the total bill to the tune of Rs3700. The taxes levied multiplied the actual bill by three times. This composition of the electricity bill is however not easily swallowed by the consumers of average income group in Pakistan. The break-up of the bill in this case will give an idea to the decision-makers.

Energy charges for 390 units estimated at Rs1208.40
Surcharge Rs125.67
Additional Surcharge Rs1665
Electricity Duty Rs48.34
Income tax Rs600

After adjustment of other provisions the total comes to Rs3700/-. This is just an example of small consumer to give an idea of the unrealistic price level of electricity in our country.

Since the electricity is supposed to be the basic component of the industrial manufacturing, its multiplier effect on general prices is burning the candle from both ends. On one hand the consumers have to pay unaffordable electricity bills while on the other hand have to bear the price inflation due to enhanced cost of production on account of expensive electricity.

The step taken by the newly elected government no doubt is a welcome step; however, the domestic, industrial, and commercial consumers are of the view that instead of reducing the price of electricity units relief should be provided by doing away with the additional surcharge. It is the additional surcharge which makes all the difference. Previously, the government of Nawaz Sharif had waived this additional surcharge by 50 per cent but later on this incentive was withdrawn. It is strongly recommended by all sectors of the economy as well as the society that the elected government should provide a relief to the people as well as the economy from the clutches of additional surcharge, which is causing crippling effects on the kitchen of the poor.

The federal cabinet last week has slashed power rates both for commercial and domestic consumers with a promise to bring down prices of other essential items also.

The decision to cut power rates supposedly came as a rider because the national Electric Power Regulatory Authority (NEPRA) was in fact responsible to take such decisions. The minister, however, clarified that NEPRA would continue to perform its function but the decisions of the Cabinet would be binding on the institution.

Sheikh Rashid Ahmed, Minister for Information and Media Development, while announcing the steps taken by the federal cabinet, said that the government was committed to cut the rates of gas, sugar, ghee and medicines. As promised by Prime Minister Jamali, the government would try its level best to alleviate financial hardships faced by the masses, he added.

The federal cabinet at its meeting with Prime Minister Jamali with chair also approved a development package of Rs3.5 billion, which would be utilized by the members of the National Assembly for development works in their respective areas. Under this package each member of the national assembly would be entitled to spend Rs5 million for the betterment of civic facilities for people.

Earlier, the Prime Minister Jamali had announced that his government would bring down power charges, edible oil, ghee and other household items.

The Prime Minister said that the government is determined to give relief to the people and would bring stability in the prices of kitchen items or at least no further increase in the prices would be brought in.