Flaws in reduced electricity tariff put some industries at risk


ISLAMABAD: The industrial electricity tariff relief program for additional consumption which was extended by the PTI government on August 16, 2021 has pushed some industrial units, installed well before 2019-2020, to the brink of collapse.

This is because these have become uncompetitive because the same tariff i.e. Rs 12.96 per unit is extended to new industrial units on all of their monthly electricity consumption and no on additional units because they do not have a reference year for the record of their current electricity consumption in previous years.

The PTI government had set the reference year 2019-20 for the calculation of the current electricity consumption of industries. And under the package, as approved by Cabinet ECC on 16th August 2021, during the PTI scheme, the rate of Rs 12.96 per unit is charged to industrial consumer categories (B1, B2, B3, B4 and B5) from July 1, 2021 to October 31, 2023, for additional off-peak consumption based on their consumption for the corresponding months from March 2019 to February 2020. New industrial consumers with no reference consumption available in the period from March 2019 to February 2020 are being offered the same tariff via a block consumption structure, a senior Department of Energy official told The News.

When contacted, the Power Division replied that the department had received many complaints from some industrial units and was in the process of collecting more data for this and would take action accordingly and eliminate the distortions embedded in the program. industrial relief on incremental use. of electricity.

However, the factories, the official said, which were commissioned in 2019-2020 are getting electricity at Rs 12.96 per unit, not for the extra use of electricity but to enjoy the same tariff in its total consumption.

“That is why other industries, having the record of routine electricity consumption in the previous year, first use the units of electricity at a routine tariff of Rs 23.49 during off-peak hours and Rs 29 Rs.49 during peak hours as per registered units. at the same period of the previous year.

These industries were likely to have an electricity tariff of 12.92 rupees per unit under the relief program against the use of additional electricity, also known as additional use of electric power, the official added.

This has created a huge distortion in tariff billing between two types of industries – the new ones, which have been operating since 2019-20 during the PTI regime and the old ones, which have been operating before 2019-20. And because of this tariff distortion, the old industries are no longer competitive in the country’s market and they have no choice but to close their activities.

“In the presence of this differential treatment under the cover of the tariff of Rs12.96 in accordance with the relief package, we cannot manage our businesses because the products being prepared by an industrial unit, launched in 2019-2020, throw away their products in the market at a reduced price compared to our products which are produced with a high entry cost in the form of electricity at a high average tariff,” Mohammad Rehan, a business tycoon from Gujranwala told The News.

He said his competitors who started production in 2019 were using all the electricity at 12.93 rupees per unit and they were not paying 12.96 rupees per unit for extra usage as they had no record of the electricity consumption of the previous year.

Rehan said he was running his industrial unit, not at 100% capacity, but at 50% due to the high average tariff (tariff on current electricity consumption plus emergency tariff of Rs 12.96 on additional units).

“New units installed in 2019-20 only pay a standby tariff of Rs12.96 on all their electricity. This is why the old industrial units receive abnormally high bills compared to the new ones.

Rehan stressed that these differential treatment flaws in the relief program must be eliminated as soon as possible to ensure a level playing field for old and new industrial units. The PTI government had urged industries to consume electricity to the maximum to utilize the country’s excess generation capacity and offered a tariff of Rs 12.96 per unit on additional units.

Capacity payments remained at 850 billion rupees in the last fiscal year, which have now jumped to 1.4 trillion rupees in the current fiscal year. The industrial tariff has been extended to a lower tariff of Rs 12.93 per unit under the Additional Electricity Usage Relief Scheme.


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