Huddle led by PM fails to come up with immediate respite for power consumers: Kakar seeks relief plan within 48 hours

ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar, in the wake of massive countrywide protests against inflated electricity bills, directed the officials concerned on Sunday to present a concrete plan in the next 48 hours, rationalising the power tariff.

While chairing a meeting here at the PM House to address the issue, Kakar said such measures that did not burden the national exchequer but facilitated consumers should be taken.

“We will not take any decision in haste, which could damage country’s interest and put burden on the national exchequer,” he said. “While staying within its mandate, the caretaker government will try its best to provide maximum relief in minimum possible time to masses in their powers bills,” promised the caretaker premier in a post on social media.

As the situation with regard to large-scale protests is worsening, the high-level meeting failed to reach any decision. However, the second round of the huddle on Monday would also be attended by provincial chief ministers and officials concerned.

Meanwhile, incensed citizens, already battered by skyrocketing inflation, continued to take to the streets in several cities across the country for the third consecutive day on Sunday, protesting against the massive hikes in electricity tariffs and increased taxes.

Citizens staged a protest in Punjab’s Rahim Yar Khan city, blocking the main road while in the province’s Chunian city, angry power consumers blocked the Exchange Road and set their bills ablaze.

Protesters across the country demanded a reduction in electricity tariffs and removal of excess taxes in the utility bills, warning that they would not pay the bills if the demands were not met.

Traders, too, protested in Hafizabad, leading a rally from the city’s Fawara Chowk to the press club. In Okara’s Hujra Shah Muqeem, people came out for demonstrations as well. Protesters burnt electricity cables and raised slogans against the Water and Power Development Authority and the government.

Demonstrations by citizens and traders were also held in Faisalabad, Lahore, Risalpur and Khyber-Pakhtunkhwa’s Nowshehra district against the hike.

The National Labour Federation (NLF), led by Shamsur Rehman Swati, while supporting the call, directed the workers community across the country to carry out joint demonstrations.

Federal Minister Dr Shamshad Akhtar, Gohar Ijaz, Murtaza Solangi, Advisor to Prime Minister Dr Waqar Masood, Secretary Power Division, Chairman Wapda, Chairman Nepra and other senior officials attended the first round of emergency meeting, which the PM had convened on Saturday.

The PM also stated that power sector reforms and short-, medium- and long-term plans should be presented at the earliest. The PM also directed the relevant ministries to provide complete details of officers and institutions enjoying free electricity. He said it could not happen that the common man was facing hardships while the PM and bureaucracy enjoy free electricity on the tax money. He claimed that he represented the common man, saying he would not mind even if air-conditioning plant of his room was switched off. He said there should also be minimum use of electricity at the Prime Minister’s House and Pak Secretariat.

It was also decided that during the second round of meeting on Monday, there would be detailed consultation on the issue of excessive bills of July and implementation of the energy saving measures with the provincial chief ministers. The distribution companies would present a complete roadmap to stop electricity theft across the country.

Meanwhile, the caretaker government has decided to place an ordinance in the cabinet meeting in a week’s time to check the electricity theft, which has risen to Rs550 billion. The non-recovery of electricity bills would also be treated as electricity theft in the draft ordinance. The government would establish an anti-theft electricity force across the country, which will not only help curb electricity theft but would also help increase the recovery of electricity bills. Electricity theft and non-payment will be treated as a serious offense.

The government has also started reviewing the initiative of the net metering of solar panels installed by people on their roofs as it has caused an increase in capacity charges payments, which is the main source of inflated bills.

The government has to collect Rs3.29 trillion from consumers in Finance Year 2023-24 out of which consumers have to pay Rs2 trillion in the form of capacity charges. The country has an installed capacity to generate electricity of 41,000 MW.

The 1,000 MW of solar energy is being produced by people across the country on their roofs and they are selling their additional solar energy to the government. Because of the solar panels of 1,000 MW, the system’s electricity is not being sold, and resultantly the capacity charges for electricity have increased, causing a surge in electricity bills.

The decision in this regard was made in the meeting held on Sunday with caretaker PM Anwaar-ul-Haq Kakar in the chair. Power Division and DISCOs officials gave the presentation on the circular debt and capacity charges payment of Rs2 trillion. In the presentation, the Power Division secretary informed the participants that theft and recovery losses have gone up to Rs550 billion. However, circular debt report FY23, keeping in view data of FY22, reveals system losses of Rs125 billion and recovery losses of Rs249 billion.

The top notches of the Power Division and Finance Ministry would put their heads together to work out in 48 hours, fiscal space for relief knowing the fact the government is under tight fiscal discipline of the IMF under its Stand-By Arrangement loan. After that, top mandarins of the Finance and Power Division would give a final presentation on various scenarios before the caretaker PM on relief in electricity bills.

When asked if there was any proposal to generate only local fuel-based electricity and pass the deficit in the form of loadshedding of 5-6 hours to consumers across the board, relevant officials said that it would help increase the adverse impact of capacity charges payments. Right now, the share of capacity payments stands at 70 per cent in the tariff. However, in case the 18 per cent GST on electricity bills is done away with, then reasonable relief can be passed on to consumers, but the impact on revenue promised by the government to the IMF has to be worked out.

“Finance and Power Division officials will have to come forward with options to explore more avenues to cope with the loss in revenue. For this purpose, the financial managers perched at the Finance Division will also have to take the IMF on board, otherwise the country cannot afford defaulting IMF.”

Ex-Prime Minister Shahid Khaqan Abbasi, who also played his role as chairman Energy Task Force in the last PDM government, when contacted, said the government should deduct 35 per cent of electricity bills right now as an immediate relief and pass the deducted amount on to consumers in staggered form in five months of forthcoming winter season. This is the only recipe to provide relief to the people. He argued that in the winter season, electricity bills would tumble as the consumption of electricity nosedives to just 10-12k MW as air conditioners and fans that consume maximum electricity will be no more in operation.

He also suggested to the people at the helm of affairs that the impact of first quarterly tariff adjustments (July-September, of FY2023-24) should also be passed on to consumers in the winter season in a staggered form.