PM Kakar seeks plan for reduction in high electricity bills within 48 hours

A day earlier, protests were held in cities across the country, due to exorbitant electricity bills on the back of a significant increase in the national average tariff.


Protests in Multan over extremely high electricity bills, August 27. PHOTO: DAWN

August 28, 2023

ISLAMABADInterim Prime Minister Anwaarul Haq Kakar directed relevant authorities on Sunday to devise “concrete steps” for a reduction in inflated electricity bills and present the plan to him within the next 48 hours.

He issued the directives at an emergency meeting at the PM’s Office (PMO) in Islamabad, which he announced a day ago amid countrywide protests by citizens over inflated power bills.

A day earlier, protests were held in cities across the country — which continue today — due to exorbitant electricity bills on the back of a significant increase in the national average tariff, prompting Kakar to summon an emergency meeting.

Another round of the meeting would be held tomorrow (Monday), a statement issued by the PMO said, adding that the interim premier was given a detailed briefing on the high electricity bills for July during today’s session.

Addressing the meeting, PM Kakar said, “We will not take any step in haste that will harm the country. We will take measures that won’t further burden the national exchequer and will facilitate the consumers.

“It is not possible that while the people face difficulties, high-ranked officials and the prime minister continue to consume free electricity paid for with the taxes people pay.”

Saying so, he directed relevant departments and ministries to submit to him the details of the officers who were being provided free electricity, the PMO statement said.

“I represent the common man,” he said, pledging that measures would be implemented to minimise electricity consumption at the PM House and Pak Secretariat. For that, he added, “even if the air conditioner in my room has to be turned off, do it.”

Regarding tomorrow’s session, the PM said he would hold a detailed consultation with provincial chief ministers on the exorbitant bills for July and the implementation of measures for energy conservation.

The PMO statement said he further sought a roadmap from electricity distribution companies to curb electricity theft.

Moreover, the PM directed relevant authorities to submit a short-, medium- and long-term plan for reforms in the power sector “as soon as possible”.

He later said on X that the interim government would try to provide as much relief to the people as possible while operating within its mandate.

Interim Finance Minister Shamshad Akhtar, caretaker Commerce Minister Gohar Ijaz, interim Information Minister Murtaza Solangi, adviser to PM Kakar Dr Waqar Masood, the power secretary, Water and Power Development Authority chairman, National Electric Power Regulatory Authority chairman and other relevant officials attended the meeting, according to the PMO statement.

On Saturday, the interim government devised a plan to withdraw subsidised electricity availed by Discos and government officers in grade 17 and above.

Interim Information Minister Solangi confirmed to Dawn that the facility of free electricity units to Discos officers would be discontinued as well and the “summary to take back the facility of free electricity to grade 17 and above officers would be presented in the next cabinet meeting”.

Protests held in several cities

Meanwhile, protests were held in Multan, Lahore, Karachi and elsewhere against the exorbitant power bills.

Residents and traders in Multan’s Alfalah Market took to the streets to protest against the electricity bills as they held banners and set tyres on fire, hence blocking roads.

Speaking to DawnNewsTV, one of the protestors lamented that he was the sole breadwinner of the family and his bill was Rs24,000 even though he only used “one refrigerator and fans”. He added that last month too his electricity bill was Rs23,000.

Another man said, “Flour is Rs150/kg, petrol is Rs300/litre — tell me where should I go, what should I do?”

“Should I give poison to my children?” he asked while visibly enraged. “Why is Wapda (Water and Power Development Authority) given free electricity?”

Stating that his electricity bill was Rs15,000 while house rent was Rs13,000, he asked, “Should I commit robbery? To us peaceful and pious citizens… I ask you to correct yourselves otherwise the public will not let you go.”

He then called for reducing the bills by 75pc, asserting that that was everyone’s demand.

During a press conference held by the Markazi Tanzeem-e-Tajran Pakistan, it announced initiating a “protest movement” against the excessively high bills.

The union’s chairman, Khawaja Salman Siddiqui said, “If the demands (to lower power prices) are not accepted, we will proceed towards a civil disobedience movement.”

Meanwhile, residents, including women and children, in Lahore’s Shahdara also held protests they burned this month’s bills and vowed to not pay them.

Video footage from Lahore showed a pile of bills set on fire as dozens of people of all ages gathered on the streets and chanted, “Bijli mehngi, namanzoor [Expensive electricity is unacceptable].”

One of the women told DawnNewsTV that she did not have money and her husband was a labourer, hence “could earn a wage some day and not on other days”.

“Do we satisfy our children’s hunger or get them educated?” she asked. She stated that her power bill last month amounted to Rs10,000, therefore she had not paid it. “We cannot pay this huge bill. Help us, do something.”

Another woman asked, “Do we pay [house] rent or [electricity] bills or fulfil the needs of our children?”

In the evening, Karachi traffic police posted on X that a protest against inflated power bills was staged at Aisha Manzil.

Political parties warn of protests if public not provided relief

Meanwhile, Jamaat-i-Islami (JI) chief Sirajul Haq announced holding a nationwide strike on September 2 against the “exorbitant increase in electricity prices, where people from “Karachi to Chitral would take to the streets”.

The party’s Karachi president, Hafiz Naeemur Rehman, urged PM Kakar to “ announce immediate relief for the people“ in today’s meeting on the matter.

He demanded that the power bills should be “revised by eliminating illegitimate taxes” and that the bills’ due date should be extended.

Rehman added that if a significant reduction was not made in the bills, the JI would go on a strike and hold protests across Karachi on Monday and a sit-in outside the Governor House, according to consultations with industrialists, traders, and civil society.

The party said in a statement that leaders of traders’ bodies, including Attique Mir, Mahmood Hamid, Shaikh Alam, Asif Gulfam and Sharif Memon. also addressed the protesters at the demonstrations held by the party in multiple areas of Karachi today.

Meanwhile, PML-N leader Khawaja Asif said that the International Monetary Fund (IMF) should be approached to negotiate on the possible relief that could be provided to the public.

The former defence minister proposed that the range of units consumed for lifeline consumers should be extended to 300 units from 200.

He further proposed that the current rule — under which anyone using more than 200 units even for one month is disqualified from any relief for the entire year — should be changed to a monthly assessment instead.

The PML-N leader also asserted that the “concession of free electricity to those appointed at above Grade 17 in all government institutions” should be put to end as well.

Asif claimed that “70-80pc of electricity theft occurs in the markets of major cities”, which burdens the common user. He added that the federal government pays more than Rs900 billion to cover subsidies, theft, underpayment and line losses.

Separately, Jamiat Ulema-i-Islam-Fazl (JUI-F) also urged the interim government to take immediate steps, cautioning that if it “does not show seriousness, defeated politicians can take advantage” of the situation.

Meanwhile, the Muttahida Qaumi Movement (MQM-P) also called on the government to take immediate steps to address the people’s concerns.

Addressing a press conference in Karachi, Khalid Maqbool Siddiqui urged the caretaker governments in Sindh and the Centre to resolve the issue at the earliest.

He said that the situation was moving towards becoming a law and order situation. He expressed concern over protests turning into violence. “If steps are not taken for immediate relief regarding electricity bills, then — due to the difficulties being faced by the people — we will not only be forced to become a part of their protest but will […] also have to announce some steps.”

Siddiqui lamented that the burden of Wapda’s circular debt was being put on the shoulders of the people of Karachi. He again urged the government to announce immediate relief for the public.

“Hyderabad is seeing load-shedding lasting 12-14 hours. The businessmen there are now forced to protest. The call that they have given, MQM has no other choice but to support this protest if the government does not have a solution.”

Siddiqui said that despite the long hours of load-shedding, the power bills remained the same. “We want to assure the people of Hyderabad that we are standing with you in this issue,” he said.

Dr Farooq Sattar stated that the country was quickly headed towards “anarchy”. He said that the power bills and tariffs had gone beyond the people’s reach. “The upper middle class is also not in the position […] to pay power bills.”

Giving an example, he said that if a household had a monthly bill of Rs2,000, then it would be 43-48 per cent more due to taxes. “Taxes on using electricity? Nowhere in the entire world is there tax on using electricity.”

Sattar said that the country and the public were moving towards “civil disobedience”. He said that the party stood with all traders, the people, and the people of Sindh and Karachi.

He called on the government to place this matter before the International Monetary Fund (IMF). “If the country is destabilised, then no one can stop extremism and terrorism from boiling over.”

Separately, the Pakistan Markazi Muslim League announced the beginning of a “countrywide protest”, demanding that the interim government withdraw its decision to raise electricity prices and “enforce unannounced taxes”.

The party said in a statement it held demonstrations in Lahore, Gujranwala and Sialkot, adding that its protest would continue until its demands were met.

In a late-night statement, PPP’s Nayyar Bukhari urged his party’s workers to stage protests against exorbitant power bills at the level of city union council and tehsil.

The citizens were in anguish due to high electricity bills, he said, adding, “PPP workers should become the voice of the people and protest high electricity prices”.

Experts say taxes cannot be lowered

Experts believe that the taxes and levies on electricity bills cannot be lowered in the short run. Maaz Azam, an analyst at Optimus Capital, said that it was not feasible for the current interim government to reduce or even delay the collection of any tax — especially keeping in view the pressure from the IMF to maintain fiscal balance. He added that it was primarily due to the high base tariff of Rs30 per unit that the electricity bills were inflated.

The report released by the National Electric Power Regulatory Authority (Nepra) highlighted that in the base tariff, Rs23 was regarding Power Purchase Price, and within it, 72pc was the capacity payment component, which is the cost of maintaining the power plants operational even when the government was not buying electricity from them.

In July, Nepra while determining the base tariff estimated that inflation in the country would be at 17 per cent while the dollar would be at Rs286 – and both estimates have already been proven wrong.

Analysts fear that there is no solution in sight. Samiullah Tariq, head of research at Pak-Kuwait Investment Company said, “We are in a complicated situation because there had been delays in determining the tariff and making recoveries around 12 months ago; now the key issue is the highly volatile exchange rate.”

As pointed out by the analysts, electricity bills for the month of September can be inflated due to the high base tariff. Public pressure, including street agitations, can be expected in the coming days since the politicians have also joined the bandwagon.

Recently, the Power Division requested Nepra that the Rs5.40 per unit additional quarterly tariff adjustment (QTA) pending for April-June 2023 should not be implemented in this form.

The officials of the power division requested Nepra that consumers should be charged at a rate of Rs3.55 per unit for six months, instead of Rs5.40 per unit for three months, to reduce the price shock on consumers still struggling to absorb 26pc increase in base tariff notified in July.

However, Samiullah Tariq said that the only solution in the midterm and long term was to “unbundle the electricity and gas utility companies and privatise them without any political or other interferences”.

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