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Discos facing Rs201.823 bn deficit: Govt set to pass on burden to end power consumers

By Khalid Mustafa
March 07, 2019

ISLAMABAD: The electric power distribution companies (Discos) are facing deficit of Rs201.823 billion in first six months of the ongoing fiscal and to bailout them, the federal government has asked Nepra to increase the electricity tariff by Rs1.80 billion. The regulator has approved the petition of the government and to this effect has set the hearing date.

The government in its petition has decided to pass the burden of Rs201.823 billion to electricity end consumers and if the Power Division manages to convince, the average national tariff will increase to Rs17.33 per unit from exiting Rs15.53 per unit.

The government is on the tight rope as it is left with two options; one to provide the subsidy to Discos or increase the tariff to meet the shortfall of Rs201 billion and there is no third option left to the government. The cash strapped government is unable to extend the subsidy because of massive shortfall of Rs237 billion in first 8 months. Meanwhile, the circular debt has also increased to whopping Rs1.6 trillion for which the government has arranged Rs200 billion from the consortium of Islamic banks against the assets of the Discos and Gencos.

It is pertinent to mention that Power Division after ECC approval on January 1, 2019 issued the notification under national tariff policy to increase the power tariff by Rs2.50 per unit. According to the official document available with The News, the Finance Ministry is not ready to pay additional subsidy against the electricity theft, line losses and the Net Hydel Profit and keeping in view the expected IMF programme, the sitting government adopted the policy to perpetually pass the more burden on to the electricity consumers. And to this effect, Power Division has approached Nepra seeking raise in tariff by Rs1.80 per unit to meet the shortfall of Rs201.823 billion. Nepra will hold hearing on the petition on March 13.

According to the official document, Iesco is facing the deficit of Rs25.50 billion, Lesco Rs34 billion, Gepco Rs15.80 billion, Fesco Rs39.50 billion, Mepco Rs35.60 billion, Pesco Rs31 billion, Hesco Rs5.50 billion, Quesco Rs8.40 billion, Sepco Rs1.8560 billion and Tesco Rs770 million. If Nepra increases the national electricity tariff up to Rs17.33 per unit from exiting Rs15.53 per unit, it will further expose the common man to the more surge in inflation and more importantly it will also inflict huge dent in input cost of the industrial production.