KCCI rejects NEPRA’s unlawful increase in base rate by Rs7.90

President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Idrees has totally rejected the unlawful increase in electricity base tariff by Rs7.90 per unit for next budgetary year 2022-23 likely to be announced by National Electric Power Regulatory Authority (NEPA) today (Thursday) as it would prove detrimental for the industries due to high cost of doing business and would also open up yet another floodgate of inflation because, in addition to making the electricity bills costlier and unaffordable for consumers, this exorbitant hike in base tariff would escalate prices of all the household goods being widely used in every household.

In a statement issued, President KCCI Muhammad Idrees pointed out that the decision to increase base tariff was clearly unlawful as it was in violation of NEPRA’s rules and regulations because any increase in tariff has to be determined and implemented only after holding public hearings but unfortunately, they have not done so and solely decided to raise the base tariff which was unacceptable.

He stated that the increase by Rs7.90 per unit would raise the base tariff to Rs24.41 per unit from the existing base tariff at Rs16.51 per unit, which would not put the survival of industries at stake but would also make the lives of poor public more miserable as they cannot afford any further increase in electricity bills in the ongoing era of inflation. “Every month electricity consumers are already paying an additional amount in between Rs 4 to Rs 6 per unit on account of Fuel Cost Adjustment due to unprecedented rise in fuel prices in the international markets while the addition in base tariff by Rs7.90 per unit would make finished goods uncompetitive in international markets and unaffordable in local markets”, he said, adding that the economy and businesses would only flourish when the cost of doing business is brought down by substantially reducing the electricity, gas and water tariffs.

While commenting on today’s appeal appearing in a section of press, Muhammad Idrees said that this appeal has been attributed to some trade associations but the content of the appeal clearly indicates that it has been drafted and sponsored by KE whereas the content in the said appeal was a misquote of everything.

He said that the claim pertaining to KE receiving RLNG only at whatever price was totally baseless as to date, the 73 mmcfd of the gas comes from natural resources while the remaining was RLNG.

Moreover, declaring 17 percent surcharge under FCA or any other figure was purely the business of NEPRA so the regulator will decide what kind of a fuel adjustment surcharge is to be passed on and which should be taken as a subsidy from the government.

He was of the view that KE was may be rightly worried over the prevailing situation since interest rates have risen to a very high levels and in such a situation, when the subsidy payments were delayed by the government, KE has to pay financial expenditure in unit terms which would increase manifold due to increase in interest rate. “If they buy natural gas, the bill would be of natural gas and they don’t have to go for subsidy recovery from the federal government.” Furthermore, NEPRA should review legality of the said appeal and find out who was actually behind it.

Since electricity is a major component of production, President KCCI strongly pleaded against adding an otherwise avoidable burden of costlier electricity which was going to terribly affect the industrial activities, create problems for public and plunge the economy into more crises.

He stressed that the government has to understand that the industry, manufacturing sector and all other sectors cannot bear more than what their competitors were paying and it was definitely not the right time to exert more pressure by raising the electricity tariff because the economy was already in deep crises, masses were hardly able to make their bread and butter while the industries were struggling to somehow stay afloat.

He said, “NEPRA, instead of providing relief to the already overburdened citizens and the business community during the ongoing difficult times, was taking an anti-business and anti-public action.”

“We appeal Prime Minister Shehbaz Sharif to take notice of NEPRA’s unlawful actions and issue strict directives to NEPRA follow the rules and regulations which compel the regulator to hold consultations with stakeholders and implement increase in tariff only after holding public hearings”, he added.

Expressing deep concerns over enhanced load shedding being carried out by KE in many areas of Karachi, he said that KE was facing a shortfall of 400MW mainly because Bin Qasim Power Station-III was currently generating only around 200MW to 350MW electricity against its total capacity of producing 900MW. Although tunning and maintenance of the machines installed at BQPS-III was currently underway but this has to be expedited and completed within the shortest possible time so that relief could be provided to the perturbed Karachiites.

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