ISLAMABAD: Federal Minister for Power Omar Ayub Khan on Saturday blamed the previous government for maintaining the energy cost at lower level which has led to increase in losses and financial stress for gas utility companies.

Addressing a press conference at the Press Information Department here on Saturday, he said that the Pakistan Muslim League-Nawaz (PML-N) government had “laid landmines” in various sectors, including gas and electricity, that had led to increase in energy charges.

He said Rs2.3 billion would be returned to 3.5 million consumers of the Sui Northern Gas Pipelines Limited (SNGPL) that was collected by the company in terms of gas pressure factor last year.

“This decision was made by the SNGPL board today. Apart from it the benefit of one slab in the gas bills will be available to the consumers,” Mr Khan said.

No increase in tariff for consuming 300 units of electricity per month

He said that the PML-N government had left behind Rs189 billion circular debt in the gas sector as it sold gas at a lower price than the cost incurred by the gas companies. He explained that the cost was Rs738 per mmbtu but Rs540 per mmbtu was charged by the companies that led to serious financial repercussions for them.

“We too could have continued this way by juggling figures but it would have led to bankruptcy of the gas companies,” Mr Khan added.

He said that there was no change in the rates for the lowest end consumers consuming up to 0.5 HMQ (a gas unit), while limited increase had been passed on to the consumers consuming up to 3 HMQ who accounted for about 95 percent of gas consumers in the country.

However, no increase had been made in the charges for consumers burning 4 and 5 HMQ gas which was equivalent to 40 cylinders in a month, the minister said, adding that the rates for this category were already high.

Similarly, he said, no increase had been made in gas charges for Tandoors and bakeries.

Gas consumption by consumers, mainly domestic consumers, jumped by up to two slabs in winter only because of inefficient geysers, he said and added that the consumers needed to control this extra consumption.

He also spoke about the state of power sector and said that previous PML-N government had “laid landmines” all over electricity sector too and one of those landmines was the high capacity charges of power plants. “Rs190bn has been determined by Nepra to cover the landmine which the PML-N government left behind. This will exit the system after 18 months,” he said.

The minister announced a set of measures taken by the government to provide relief to power consumers, most notably a freeze in the tariff for domestic users consuming 300 units per month, who account for up to 75pc of total consumers.

He said that a separate subsidy of about Rs217bn had been kept aside by the government, which would be given to different categories of consumers, including domestic consumers.

“Besides, for users who consume more than 300 units, let’s say around 400-500 units, the increase will be only half of what was proposed by Nepra so that the burden on them is reduced.” Mr Khan added.

He also announced that a subsidy of 54pc had been set for tubewell consumers, while small businesses and general stores, which accounted for 95pc of the commercial sector, would not face any increase in power tariff.

The export-oriented sectors also were being given some relief, he added.

The minister said that loadshedding had been eradicated at 80pc feeders and overbilling was being controlled by the distribution companies.

Published in Dawn, June 30th, 2019