K-Electric’s slab silently bifurcated to fully benefit from tariff hike: KCCI

September 1, 2015 Off By Web Desk

KARACHI: President of the Karachi Chamber of Commerce and Industry (KCCI), Iftikhar Ahmed Vohra has said that the government has imposed another slab on K-Electric consumers by silently bifurcating the previous slab of 100-300 units/ month into two slabs, i.e. 100-200 units/ month and 201-300 units/ month with a view to apply the upward revised tariffs to those consumers who consume more than 200 units a month.

In a statement issued, President KCCI said that 65 percent of K-Electric consumers were those who fall in 100-300 units/ month category and now with the addition of another slab, consumers of more than 200 units per month have been subjected to 26 percent increase in tariff, raising the tariff from Rs8.11 to Rs10.20.

He mentioned that Advisor of KCCI Sub-Committee for Public Sector Utilities, Power & Gas, Dr. Qazi Ahmed Kamal expressed deep concern over the controversial bifurcation and enhancement of tariff on usage of 201 units/ month at a Public Hearing meeting organized by National Electric Power Regulatory Authority (NEPRA).

Referring to KE’s billing criteria which included previous slab benefits for 201 unit users, President KCCI stated that billing for this slab might now be calculated without giving benefit of previous slabs .

He blamed the government for playing havoc with consumers by paving way for the utility service provider to not only enhance profitability but also support losses and inefficiencies of power generation units. “KCCI totally rejects this arbitrary and illegal route adopted by the government for fleecing the hapless residential consumers”, he added.

Iftikhar Vohra further stated that KCCI has approached the Ministry of Power, K-Electric and NEPRA to obtain a copy of SRO 677/1 of 2015 to evaluate the logic behind allowing raise to K-Electric. He said that even if it was based on subsidy withdrawal and does not require a hearing, the factual position should have been publicized.

“It seems ECC has illegally stopped giving subsidy benefits to under 200 unit / month users, trespassing on provincial autonomy and bypassing the CCI mandate. Although it has passed a law to make the bills increase of users up to 200 units but ECC has not directly influenced the tariff structure as done in case of recent hike in gas through OGRA”, he added.

He criticized the government for across-the-board raise in gas tariffs, which was an epitome of bad governance, mismanagement, corruption and complete submission to IMF dictates. “Instead of putting its own house in order, the government decided to overburden the end users and it was tantamount to killing the Industry”, he added.

He was of the view that the decision to raise gas prices for Industrial consumption and captive power plants will have a devastating impact on the export performance of the country as Pakistani exporters will lose competitiveness due to exorbitant cost of doing business. “The increase in gas rate for captive power plants will gradually reach per unit cost of KE, directly affecting exporters’ calculations which is indeed a matter of grave concern”, he added.

President KCCI stated that the aforementioned increase gas tariff was totally illegal as it has been imposed under ECC guidelines to OGRA, again trespassing on provincial autonomy and bypassing the CCI mandate.

He further noted that although the price of crude oil has gone down by 60 percent but less than 30 percent of the benefit has been passed on to people. POL prices would have been somewhere around Rs50/ liter if the benefits of declining international oil prices were fully passed on to the masses. “It seems that the government is the sole beneficiary of descending international oil prices as taxes on oil have been enhanced to an extreme level of 45 percent”, he added.