ELECTRICITY: TARIFF & TAXES
The exorbitant electricity charges are self-explanatory of the unaffordable price level for the people with average income of Rs5000 a month
By AMANULLAH BASHAR
Aug 25 - 31, 2003
Contrary to the expectations that the government may reduce electricity charges, a three paisa raise has been allowed to WAPDA while a move by KESC for an increase of 14-paisa is also in line which will also likely to be given a go ahead by the government.Leaving aside the juggling of the figures, the electricity consumers in the layman's language are paying around Rs9 per unit if the units consumed in a month divide the total amount of the electricity.
According to the details of a monthly bill, the KESC issued a bill of Rs3100 for 362 units consumed. The amount of Rs3100 includes Rs2686.24 for electricity charges, Rs15 for meter rent, Rs43 electricity duty Rs350 Income Tax, however the amount of Rs412 under GST regime has been adjusted.
The exorbitant electricity charges are self-explanatory of the unaffordable price level for the people with average income of Rs5000 a month in this country. This also clarifies why the power theft level is so high in Pakistan.
Although the policy makers claim to have given relief to the low-income group consuming electricity up to 50 units a month which sounds a funny proposition. Even if a consumer uses only two bulbs or tube lights and a fan in his house, he will cross the slab of 50 units any time, what does it make sense to allow lower tariff for 50 unit consumers. One Television set, a Fridge, washing machine and an Iron are the necessities of the modest living and not the luxuries. If the policy makers are convinced with this point of view, they should decide how a consumer on earth could adjust his electricity consumption within the limit of 50 units. There are strong recommendations of the people that the lowest slab for the low-income group should be fixed at 300-unit slab if the government was really serious in its priorities for poverty reduction from the society.
In fact, it is not the electricity charges but the government levies and taxes which are responsible for taking the electricity charges beyond the reach of the general consumers. Recently, Gazi Barotha yet another hydel power project was put in operation. It was revealed by an engineer of the project that per unit cost of the new project was estimated at paisa 53 per cent. At present about 30 per cent of the total electricity generated under WAPDA system was hydel and the remaining 70 per cent produced under thermal system involving oil-fired system. Obviously, the cost of oil-fired system is much higher than then the hydel power but not to that extent that the power generating companies should charge around Rs9 per unit. There should be some rationale so that not only the social life but also the economic life of the country could face the forthcoming onslaught of the foreign made goods under WTO regime. The government will have to take steps for bringing down the electricity rates at an affordable level in the larger national interest.
Although the government has set up a committee to look into the ways and means for bringing down the electricity rates, yet it has not come up with the expectations of the people so far.
The decision for increase in tariff has come after approval from the Prime Minister on the determination of National Electric Power Regulatory Authority (NEPRA) issued on July 22.
Earlier, the government's instruction to Tariff Rationalization Committee (TRC) to finalize proposal on the tariff reduction had raised hopes of the electricity consumers for a reduction in power tariffs, however, the hopes were marred with the increase in power tariffs. The government had constituted a 15-member TRC in June this year. The decision of the constitution of a committee was taken on May 12 on the directives of Prime Minister Mir Zafarullah Khan Jamali in an Inter-ministerial meeting presided over by Federal, Water and Power Minister Aftab Ahmad Khan Sherpao.
The TRC after the passage of about seven week time has presented its recommendations to the minister, but they were given another six weeks time for the final report.
Currently, the government is using the utility services like power companies WAPDA, KESC, PTCL, SSGCL, SNGPL etc, as the tax collecting agencies. The annual profits of these companies are enough to substantiate this statement. According to WAPDA Chief, his organization collected around Rs26 billion taxes during the financial year 2002-03. This gives an impression that the utility services are more interested in revenue collection instead of providing utility services to the consumers. The worst hit segment of the society was the salaried class of the high electricity or telephone charges. On one hand, they are paying the income tax at source, while they are subjected to double taxation on the other hand when they have to pay income tax on electricity bills also. If this was the lacuna in the system it should be removed at the earliest to give relief to the salaries class. The electricity rates can be reduced reasonably if the policy makers evolve reasonable and effective taxation policies through direct taxation system instead of treating the poor and the rich at par through indirect taxation system by using different utility services and other government departments for revenue purposes.