Power, finance divisions blame each other for hike in electricity price for exporters

Amid threats by exporters and the business community to close down their factories and businesses, the National Assembly’s Standing Committee on Finance and Revenue on Tuesday ordered suspension of increased power rates for export industries and its retrospective recovery from January 1, 2019.

The meeting of the panel, presided over by Faizullah, noted that Power Division’s notification of Jan 13 this year appeared to be unauthorised that increased electricity rates for export sector from 7.5 cents per unit to about 13 cents. Members of the committee were unanimous that the Power Division had misused its authority in issuing the notification and had in fact unilaterally exercised the mandate of the Economic Coordination Committee (ECC) and the federal cabinet.

The committee unanimously ordered that the division should go back to the ECC and the cabinet for a reversal of incentives to export industries if there was insufficient subsidy allocation in the budget and announce an end to the government decision to support these industries for future implementation.

However, in no circumstances would the National Assembly Finance Committee allow recovery of tariff increase with retrospective effect from Jan 1, 2019 as that was not only illegal but also practically impossible for the industry to recoup products sold in the international market.

Ministry of Finance’s Additional Secretary Dr (MoF) Arshad

Mahmood agreed that any confusion or insufficient subsidy should have been referred back to the ECC for a decision and no ministry had powers at its own to have interpret decisions of the ECC or the cabinet.

Interesting scenes were witnessed during the meeting when representatives of the ministries of finance, commerce and power tried to absolve themselves of the responsibility of the policy u-turn power tariff for export industries. Chairman Faizullah of PTI told the committee that he had personally talked to Energy Minister Omar Ayub Khan who said the decision pertained to the MoF. He said it was unfortunate that ministries were shifting responsibility to each other like a football and not taking the committee seriously even though all three — finance, commerce and power — had been asked in writing to personally attend the subject meeting or depute their secretaries.

Faizullah said he was himself witness to a few meetings including the one in which Asad Umar as then finance minister announced the export package in February 2019 that included 7.5cents per unit electricity tariff including all surcharges. The package was fully implemented under duly issued notification after the ECC approval until the Power Division issued a fresh notification on Jan 13.

Central Power Purchasing Agency (CPPA) CFO Rehan Akhtar, who represented the Power Division, said he had been told that the senior officers of the division were preoccupied with matters relating to the visiting delegation of the International Monetary Fund while he was not in a position to give any policy statement.