Govt may jack up power, gas tariffs following Punjab by-polls

Ahead of the by-poll in 20 constituencies of Punjab scheduled to be held tomorrow (Sunday), the government has made deliberate efforts to avoid hiking gas and electricity tariffs.

The increase in electricity and gas tariffs, which is to be announced in order to comply with the conditions laid forth by the International Monetary Fund (IMF), has not been notified yet.

The federal cabinet meeting held under the chairmanship of Prime Minister Shehbaz Sharif a day earlier also did not take up the issue under consideration.

The Economic Coordination Committee (ECC) had partially approved the hike in gas tariff for different slabs ranging from 43 to 353%. The number of slabs was reduced from seven to five.

However, when contacted, Federal Minister for Information Marriyum Aurangzeb confirmed that the federal cabinet did not give its nod on increasing the gas tariff on Friday.

Meanwhile, Federal Minister for Finance and Revenue Miftah Ismail told the publication after the cabinet meeting that they had sent the summary back to the Ministry of Petroleum to bring some changes in the summary for some of the sectors due to which the calculation got changed.

Hence, the summary was referred back with the direction to make fresh calculations. He also confirmed that the federal cabinet did not take up the hike in gas tariff in Friday’s meeting.

Under the Oil and Gas Regulatory Authority’s (OGRA) Amended Act, there is a defined period of 40 days after the determination of tariff by the regulator following which the determined tariff would become applicable automatically.

On the other hand, the ECC approved the hike in electricity tariff of Rs7.92 per unit in base tariff. However, it was approved to be done in a staggered manner. It had been decided that the electricity tariff would be hiked in three phases, starting from Rs3.25 per unit in July, Rs3.25 per unit in August/September and remaining in October 2022.

The Ministry of Power consulted the Law Division to explore options for requesting the regulator, the National Power Electric Authority (NEPRA), to review the earlier decision.

But official sources said that there were two different issues pending before the NEPRA. First, the petition for imposing a unified tariff was pending before the regulator and the authority would take it up next week.

Secondly, a review petition was filed by the distribution companies (DISCOs), asking the regulator to grant permission for allowing more tariff increases than determined by the NEPRA.

Under the NEPRA law, if there is no review petition filed, then the tariff determined by the NEPRA would have been notified automatically after 30 days of the determination of the tariff. The government, the sources said, approached the NEPRA before Eid-ul-Azha in order to avoid automatic notification of the determined tariff.

Top official sources said that Islamabad will have to notify both gas and electricity tariffs at all costs before the IMF’s Executive Board meeting, which is expected to be held after the second week of August 2022.

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