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