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Fuel price adjustment Court gives relief to consumers

May 11, 2012

ISLAMABAD, May 10: Justice Riaz Ahmed Khan of Islamabad High Court, while hearing a public interest petition on Thursday, restrained the National Electric Power Regulatory Authority (Nepra) from collecting fuel price adjustment charges from the consumers.

Nepra had introduced the fuel price adjustment charges to pass on the variance in the price of fuel used for generating electricity to the consumers last year.

When the court stayed the collection of the new charge on January 12, 2012; Nepra added a new section - 31(4) - to its Regulation, Transmission and Distribution Act 1997 and again started collecting the fee.

Barrister Abu Bakar Sehri in his petition claimed that the imposition of fuel price adjustment (FPA) charges on domestic consumers was illegal. He requested the court to restrain Nepra from collecting the charge for September, October, November, December 2011 and January 2012.

The petitioner told the court that power distribution companies were collecting the FPA with retrospective effects, earning a profit of billions of rupees.

He said FPA levied from retrospective effect or from the month of September was also against the interest of the consumers, adding once bills were paid by the consumers they became close transactions.

According to the petitioner, Nepra had collected Rs77 billion under the FPA between June and July, 2011, and that the authority recently imposed FPA at the rate of 87 paisa to Rs2.13 per unit for September 2011 to January 2012.

The lawyer contended that Nepra had imposed Rs2.04 per unit additional fuel price adjustment on all the electricity consumers in July 2011; Rs3.03 for August, Rs1.67 for September, Rs2.13 for October, Rs1.17 for November, 86 paisa for December and Rs1.86 for January 2012.

He said the consumers were already paying Rs4.35 per unit similar surcharge in their bills. He contended that FPA was unconstitutional and against Article 4 and 25 of the constitution as well as a violation of Section 31 of the Regulation, Generation, Transmission and Distribution Act of 1997 and the Nepra Tariff Standards and Procedure Rules 1997.

Barrister Sehri said the Balochistan High Court, Peshawar High Court and the Lahore High Court had already provided relief to the consumers by waiving the surcharge for those consumers who consumed less than 350 of electricity units per month.

Justice Khan, before issuing the restraining order, observed that none of the respondents - Nepra or Islamabad Electric Supply Company (Iesco) - appeared before the court to rebut the arguments. He directed them to submit their replies and adjourned the hearing till the third week of May.

Barrister Sehri later told Dawn that so far Nepra had collected FPA for the month of July, August and September 2011 but the court restrained the authority from collecting the surcharge for October to January.

He said in order to deceive the consumers Nepra had applied the fuel rates of fiscal year 2010-11 rather than 2011-12.