As hydro electricity produced by Mangla dam and the likes was not sufficient, power companies resorted to producing electricity by gas and furnace oil by installing heavy equipment for their production as politicians were opposing the Kalabagh dam.

Production of electricity by furnace oil costs much more than other methods and what the electricity companies are allowed to charge under NEPRA’s price control mechanism.

To keep electricity prices low, the government had started giving subsidy to internal power supplies since over a decade. The general perception is that there was much corruption and kickbacks involved in determining and paying the subsidy.

Things worsened when due to bad policies of the PPP regime, the value of the rupee started to decline and the government started defaulting in payment of their bills and subsidy payable to the power companies.

A stage was reached when producing electricity by furnace oil became commercially unviable. Many electric plants closed down and still remain closed. Otherwise Pakistan has the capacity to produce electricity for all its needs but not cheap electricity to fit the NEPRA’s price control mechanism.

Delay on the part of the government to pay subsidy, defaults in payment of bills by various organisations and individuals, massive power thefts have forced power companies to stop payment of bills for oil and gas.

Thus circular debts started mounting to hundreds of billions.

The decision to stop payment of subsidy to power companies has been necessary for the ailing economy and should have been taken long time ago but weak political regimes could not do it.

That means an increase in electricity prices to facilitate commercially viable operations is a must. But the way the government is handling the problem is not right as abrupt increase is going to enrage the masses already badly hurt by inflation.

Until it is possible to produce more hydro electricity as a temporary measure, NEPRA should get all the closed down oil plants operative by increasing rates as follows.

NEPRA should increase electricity rates only for the government, semi government and industrial establishments including hotels and shops.

For instance for all government establishments, including airports, military establishments, municipal services etc the rate could be something like Rs25 and for industries Rs18 so that profits made by electric companies from them is utilised to meet the losses on domestic consumption. And domestic consumers must not be charged more than Rs10 per unit up to 1000 unit and only on excess over consumption of 1000 units the rate may be higher.

Government should provide oil to the power companies and recover its cost from them after adjusting the bills of the government establishments.

It is also necessary that a massive crackdown on power theft be launched. A drive is being conducted but in a careless manner. It would be advisable to prescribe the same punishment for theft as in Sharia and mobile courts assisted by Rangers to give verdict on the spot.

It is not enough to disconnect the illegal connections; the culprits must be punished and an FIR filed. NA and PA should review progress in this regard if they sincerely want to solve the energy crisis.

SHAH N. KHAN
Karachi