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Express Tribune
19-07-2025
- Business
- Express Tribune
KE base tariff raised by Rs6.15 per unit
Prior approval to NEPRA K-electric consumer may seen a huge relief over electricity bills. PHOTO: FILE In a bold assertion of its regulatory autonomy, Pakistan's power watchdog has notified K-Electric's long-delayed multi-year tariffs for supply, distribution, and transmission through 2030 — despite an unresolved review motion by the federal government. The power regulator has notified Rs6.15 per unit increase in base tariff for KE consumers. The government implements uniform across the country and government provides subsidy for KE consumers to implement uniform tariff. The National Electric Power Regulatory Authority (Nepra) moved ahead with the notification after determining that no legal bar existed to halt implementation. It invoked its enhanced powers under a 2021 legal amendment, which allows the regulator to issue tariff notifications directly — authority that previously rested with the federal government. The landmark move reflects pressure from international lenders, notably the IMF and the World Bank, to depoliticize tariff-setting and fast-track power sector reforms. "This situation could impair KE's financial health and undermine power supply continuity, ultimately affecting consumers and the broader energy market," Nepra warned in its statement. The newly notified average power supply tariff for KE stands at Rs 39.97 per kilowatt-hour for 2023-24, comprising Rs 31.96/kWh in power purchase cost, Rs 2.86 for transmission, Rs 3.31 for distribution, and Rs 2.28 as the supply margin. A prior year adjustment of minus Rs 0.44/kWh has also been included. Nepra estimated KE's total revenue requirement for FY 2023-24 at Rs 606.9 billion, with Rs34.7 billion allocated for supply margin and Rs 36.2 billion set aside to cover recovery losses. Despite the formal tariff approval, KE's finances remain under severe pressure. With bill recovery slipping to 91.5pc in FY 2023-24 and projected to fall to 90.5pc next year, the utility could face cumulative under-recoveries nearing Rs97 billion over two fiscal years. Nepra cautioned that KE's permitted Rs21.6 billion return on distribution operations might be wiped out without government support or adjustments. Nepra simultaneously approved a distribution tariff of Rs 3.31/kWh and Rs 2.684/kWh specifically to support a Rs 43.4 billion investment plan over the seven-year Multi-Year Tariff period. The government had challenged K-Electric's multi-year tariff (2024-30) approved by the power regulator last week, alleging the utility got an undue favour of Rs750 billion over the seven-year period at the cost of the national exchequer, power consumers across the country and taxpayers at large. In a statement, the power division had announced that the six tariff interventions allowed by Nepra to KE entailed a financial impact of Rs453bn spread over seven years. On top of that, the division added, a fuel cost impact higher than the national average for 2024-25 alone meant an additional cost of Rs41bn, which even if it remains flat would translate into Rs287bn in seven years. The division said the government position was to seek review of the Nepra determination to ensure fairness and uniformity, tariff must reflect actual costs and reasonable returns to protect consumers and there should be no extra allowance for inefficiency.
Express Tribune
30-04-2025
- Business
- Express Tribune
PAC unearths Rs3.4b graft by 195 cotton mills
The Public Accounts Committee (PAC) on Wednesday revealed that Rs3.4 billion in taxes had not been recovered from 195 cotton mills across Punjab, Sindh, Khyber-Pakhtunkhwa and Balochistan from 2012 to 2023. The revelation came during a PAC meeting chaired by Junaid Akbar. The Ministry of National Food Security and Research came under sharp scrutiny for failing to collect the cotton tax for over a decade. The secretary for food security informed the committee that the mills had taken the matter to court, but settlements were now in the works. "We hope the entire amount will be recovered in the coming months," he added. However, committee members expressed frustration over why the matter had reached this point. Senator Saleem Mandviwala questioned, "Why did it even come to this. Why wasn't the tax collected in the first place?" The secretary responded that the ministry lacked a clear mechanism for upfront tax recovery. Chairman Junaid Akbar instructed the ministry to ensure full recovery by June. PAC member Aamir Dogar lamented the deteriorating state of cotton production, asking, "Cotton is disappearing from this country... what is being done about it?" In response, the secretary said the Central Cotton Committee (CCC) was being merged into the Pakistan Agricultural Research Council (PARC), and that efforts were underway to revive the cotton sector. The committee also raised serious concerns about the frequent reshuffling of top bureaucrats in the ministry. PAC member Hussain Tariq pointed out that four secretaries had been changed within the past eight months. The current secretary, he noted, was previously serving in the Ministry of Kashmir Affairs and Gilgit-Baltistan. "It takes six months to even understand the workings of the ministry, and by that time the secretary is changed," Tariq said, urging PAC to issue guidelines discouraging such premature transfers. Shazia Marri endorsed the proposal, urging PAC to formally advise the government against frequent administrative transfers. The committee agreed to write a letter to the prime minister on the issue. Moreover, PAC members also expressed alarm over the declining cotton yield. The food security secretary assured the committee that improvement efforts were underway and that a special committee had been formed by the prime minister to address the issue. However, the committee was informed of a Rs52.3 million loss due to the CCC's failure to invest Rs90 million. "This amount has now been invested," said the secretary, but the PAC directed the ministry to submit investment verification within 15 days. Even more concerning was the revelation that the CCC hired 155 employees without Ministry of Finance approval, leading to a loss of Rs21.6 million, according to audit officials. "These 155 employees have now been terminated," the secretary claimed. When Aminul Haque asked why the staff were fired after eleven years, the secretary clarified, "These workers were not continuously employedthey were recruited for 89-day terms during each cotton season."
