NGC seeks 86pc hike in ‘UoSC'
Of the total revenue requirement of Rs 485.392 billion for three years, Rs 112.389 billion has been sought for FY 2022-23, Rs 163.455 billion for FY 2023-24 and Rs 209.548 billion in 2024-25.
The company's top projects' management was grilled by the Parliamentary oversight Panels for massive mismanagement and corruption in projects funded by the development partners.
Use of System Charges: Higher unit cost will make power trade unfeasible?
The tariff petition states that after including less income of (Rs 5.216 billion) in 2022-23, (Rs 6.863 billion) in FY 2023-24 and (Rs 7.011 billion) in 2024-25, NGC has slashed its revenue requirement of Rs 112.389 billion for 2022-23, Rs 163.455 billion in 2023-24 and Rs 209.548 billion for FY 2024-25.
According to the tariff petition submitted to National Electric Power Regulatory Authority (Nepra), NGC requested for an increase of 24.8 per cent (coincidental) to Rs 885.07 kW/month for three years (from 2022-23 to 2024-25 from existing from Rs 712.49 kW/month) whereas the requested increase in non-coincidental charges is 24 per cent to Rs 667.03/kW/month from Rs 538.66/kW/month.
For G.E&A, NGC has proposed Rs 18.097 billion for 2022-23, Rs 24.330 billion for 2023-24 and Rs 24.961 for 2024-25. R&M- Rs 1.555 billion for 2022-23, Rs 1.831 billion for 2023-24 and Rs 2.373 billion for 2024-25. Insurance – Rs 305 million for 2022-23, Rs 344 million for FY 2023-24 and Rs 378 million for 2024-25.
The company has sought compensation of Rs 15.309 billion on account of Rupee depreciation in 2022-23, Rs 16.367 billion 2023-24 and Rs 18.668 billion in 2024-25. Financial charges- Rs 16.021 billion in 2022-23, Rs 19.697 billion 2023-24 and Rs 20.661 billion in 2024-25. Prior Year Adjustment (PYA), Rs 9.450 billion in 2022-23, Rs 38.528 billion in 2023-24 and Rs 92.774 billion on 2024-25. Corporate Tax, Rs 3.245 billion FY 2022-23 and Rs 2.016 billion in 2023-24. However, the amount for the FY 2024-25 is likely to be shared during the public hearing.
Pension fund contribution – Rs 3.838 billion in FY 2022-23, Rs 4.916 billion in 2023-24 and Rs 6.146 billion 2024-25. Exchange loss/ (gain) Rs 2.428 billion in FY 2022, Rs (892 million) in 2023-24 and Rs 972 million 2024-25.
According to the tariff petition, NGC has sought Return of Rs 47.312 billion in FY 2022-23, Rs 63.181 billion in 2023-24 and Rs 49.625 billion in 2024-25. For MDI (non-coincidental) -Kw,an amount of Rs 26.158 billion has been proposed for FY 2022-23, followed by Rs 25.287 billion for 2023-24 and Rs 26.179 billion for FY 2024-25.
For Use of System Charges (UoSC) (non-coincidental) Rs 358.04 million in FY 2022-23/kW/month, Rs 538.66 million/kW/month in FY 2023-24 and Rs 667.03 million/kW/month in FY 2024-25.
The NGC has also sought Rs 19.589 billion for FY 2022-23, Rs 19.118 billion in FY 2023-24 and Rs 19.641 billion/kW in 2024-25. The Company has also proposed UoSC rate (coincidental) Rs 478.12 million in FY 2022-23, Rs 712.49 million in FY 2023-24 and Rs 889.07 million on FY 2024-25.
According to Nepra, the petitioner has sought following relief in the tariff petition; (i) proposed Tariff (UoSC) be granted either on co-incidental basis or non-coincidental basis; (ii) allow claim for the recovery of all legitimate costs incurred prudently during FY 2022-23, FY 2023-24 & FY 2024-25 in accordance with Nepra Standard and Guidelines 17 (3)(i) to run the business; (iii) allow cost of debt in light of the GoP relent policies of the respective loans along with reasonable spread; (iv) true-up the Transmission Investment Plan FY 2023-25 according to the actual expenditure incurred by NGC; (v) approve the proposed mechanism for ISMO to ensure smooth transition and operational efficiency; (vi) continue/retain the existing payment mechanism of PMLTC invoices and direct CPPA-G to ensure timely/prompt payments; and (vii) allow T&T losses on as per actual basis and the assessment may be finalized based upon the outcome of independent consultant study on NGC T&T losses. Nepra has sought comments on the tariff petition of NGC within seven days so that these can be made part of the discussion on the day of public hearing.
Copyright Business Recorder, 2025
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To ensure a comprehensive approach, it is suggested to include representatives from IRSA, Finance Division, and Economic Affairs Division in the committee to provide technical, financial, and economic expertise. Govt of Sindh has reiterated its earlier stance on NHP, reflected in the minutes of 49th CCI meeting which is as follows; 'Chief Minister, Punjab endorsed views of DCPC and asked for early payment of Rs. 58 billion dues of NHP owned to Punjab. The Chief Minister, Sindh, endorsed the NHP claim of Chief Ministers of Khyber Pakhtunkhwa and Punjab being constitutional. He, however, did not support increase in tariff and its passing on to consumers. He said that since profit was utilized by WAPDA it should now be accounted for'. Copyright Business Recorder, 2025
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Due to persistent efforts by APTMA, FPCCI, PCGA, and PBF, the government had imposed the tax on imported cotton yarn and fabric, leading to a rising trend in local cotton prices. Meanwhile, cotton farmers claim they are facing losses at current phutti rates due to high input costs. In Sindh the rate of cotton is in between Rs 16,000 to 16,400 per maund, while the rate of Phutti is in between Rs 6,500 to Rs 7,500 per maund. The rate of cotton in Punjab is in between Rs 16,000 to Rs 16,500 per maund. The rate of Phutti is in between at Rs 6,800 to 7,500 per maund. In Balochistan the rate of cotton is in between Rs 16,000 to 16,300 per maund, while phutti rates stood between Rs 6,800 to Rs 7,400 per maund. The Karachi Cotton Association's Spot Rate Committee closed the spot rate at Rs 16,300 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman reported mixed trends in the international cotton market. New York cotton futures traded between 66 to 70 cents per pound. According to the USDA's weekly production and sales report, 39,100 bales were sold for the 2024-25 season. Vietnam emerged as the top buyer, purchasing 27,100 bales, while Turkey secured the second position with 13,200 bales. Pakistan ranked third, acquiring 5,800 bales. For the 2025-26 season, sales reached 71,700 bales. Vietnam again led with purchases of 27,400 bales, followed by Honduras in second place with 13,800 bales. Pakistan maintained its third position, buying 5,900 bales. Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute (CCRI) Multan, revealed in a conversation with Business Recorder that this year, cotton arrivals have declined by over 30 percent, reflecting the deteriorating condition of the crop and growing hardships faced by farmers. Sajid Mahmood stated, 'According to the report released by the Pakistan Cotton Ginners Association (PCGA) as of August 1, 2025, only 593,821 bales of cotton have been recorded across the country, compared to 844,257 bales during the same period last year; a deeply concerning drop.' Sajid Mahmood noted that cotton arrivals in Sindh have fallen by 47 percent, with only 292,340 bales recorded this year compared to 551,702 bales last year. 'The situation in Punjab is not much better, where 301,481 bales were reported, indicating a decline of nearly 24 percent from the previous year.' He explained that 'continuous and unexpected rainfall during July severely damaged the cotton crop. The forecast of intensified monsoon activity in August has further added to farmers' concerns. Moisture weakens the plant roots, leads to boll rot, and increases the spread of pests and diseases.' He further pointed out that extreme heat, humidity, attacks by whitefly and other sap-sucking insects, along with the distribution of substandard seeds, are major contributing factors to this year's production decline. Highlighting economic challenges, Sajid Mahmood said, 'The imposition of 18% sales tax on local cotton has drastically reduced farmers' profit margins, while the withdrawal of tax exemptions on imported cotton, yarn, and fabric has benefited spinning mills; but provided no relief to the growers.' Meanwhile, the Agriculture Department of Punjab released its cotton production estimates as of July 31, 2025, highlighting that the figures are derived using internationally recognized, scientifically proven methods. These include randomized sampling and ground truthing techniques widely adopted for yield estimation across various countries. The Crop Reporting Service (CRS) employs GPS-enabled tools and FAO-endorsed methodologies, supported by a real-time digital dashboard that ensures transparency and facilitates evidence-based policy decisions. According to the Crop Reporting Service (CRS), seed cotton in Punjab is projected to reach 609,000 bales based on harvesting data recorded up to July 31, 2025. In contrast, the Pakistan Cotton Ginners Association (PCGA) reports only 301,000 bales, which reflect only the cotton arriving at operational ginning factories in Punjab, regardless of its origin. Moreover, these figures do not account for cotton still held at the farm level, transferred to other provinces, or stored by stockists. Additionally, persistent under-invoicing reports in recent years have also significantly distorted the sanctity of cotton reporting figures at ginning factories. This year, Punjab has achieved remarkable success in cotton cultivation, with early planting carried out on 781,000 acres, contributing to a total sown area of 3.16 million acres. Extensive efforts have been made to support the crop, including enhanced field services, active participation of universities, agricultural interns, and the private sector through the cotton campaign. Additionally, Sahulat Bazaars were established to ensure the timely availability of quality seeds, fertilizers, and pesticides to farmers. Barring slight to moderate impacts from heat waves, rainfall, and localised pest attacks at certain sites, the overall condition of the cotton crop is satisfactory. All-out efforts are being made and will continue to ensure the health of the crop and to secure better prices for farmers. Moreover, to avoid any confusion, the Federal Board of Revenue (FBR) has been requested to implement a foolproof mechanism at all operational ginning factories to ensure accurate and real-time reporting of the cotton received and processed. This step is essential for enhancing transparency, strengthening data integrity, and supporting coordinated efforts across institutions involved in cotton monitoring and policy formulation. The Punjab Agriculture Department has emphatically clarified that the official record of national cotton production is based on crop reporting estimates compiled from all provinces. Therefore, drawing comparisons with the fortnightly data of cotton arriving at ginning factories lacks justification. The Department has reaffirmed its commitment to constructive collaboration with all institutions, including the Pakistan Cotton Ginners Association (PCGA), to safeguard the interests of the public, private stakeholders, and cotton farmers, and to support the development of evidence-based agricultural policies. The full leadership of the Pakistan Cotton Ginners Association (PCGA) met with Provincial Minister for Excise and Narcotics, Mukesh Kumar Chawla, at his office to express their gratitude. The delegation included Vice Chairman Raja Ramesh Kumar Utwani, former Chairman Mahesh Kumar, FPPCI Task Force Chairman Sham Lal Manglani, former Vice Chairman Harish Kumar Vedani, Chandar Lal, Kishan Hamrajani, Dilip Kumar, Ladu Mal, Thal Ram Ladkani, Rajesh Kumar Newand Rai, Sham Lal Mirpurmthelo, and Besham Lal. During the meeting, Mukesh Kumar Chawla announced the permanent abolition of professional tax and excise tax on cotton ginning industries, a move for which the PCGA expressed deep appreciation. The association had also requested the elimination of the market committee fee, to which the minister responded positively, giving hope for a favourable outcome. Sajid Mahmood, Head of the Technology Transfer Department at the Central Cotton Research Institute (CCRI) Multan, in a telephonic conversation with renowned cotton analyst Naseem Usman, stated that cotton is the backbone of Pakistan's economy. Unfortunately, this vital crop has been in steep decline for the past several years. He welcomed the Cabinet Committee meeting held on August 7, 2025, chaired by Senator Ishaq Dar, terming it a positive development. He said the meeting featured comprehensive discussions on cotton production, seed quality, modern technology, climate challenges, and the role of research institutions. The focus on translating policy recommendations into actionable steps rather than mere paperwork reflects the government's serious intent. Sajid Mehmood stressed that research and innovation are indispensable for reviving the cotton sector and emphasized the urgent need for financial support to institutions like the Pakistan Central Cotton Committee (PCCC). He termed the recent MoU signed between PCCC and the All Pakistan Textile Mills Association (APTMA) a significant step forward, noting that its full implementation could help reactivate research activities. Furthermore, he supported the proposed merger of PCCC with the Pakistan Agricultural Research Council (PARC), arguing that this would unify resources, experts, and infrastructure to enable the development of disease-resistant and climate-resilient cotton varieties. Highlighting the central role of seed quality in cotton production, he called for a strict ban on the sale of substandard and uncertified seed varieties. He proposed the establishment of a 'Seed Quality Surveillance System' incorporating DNA fingerprinting, germination tests, varietal purity checks, and a digital traceability system from seed development to market availability. He also stressed the importance of subsidies for small farmers on inputs such as fertilizers, pesticides, and machinery, along with the timely announcement and enforcement of a support price to protect farmers from market uncertainty. In conclusion, Sajid Mehmood emphasized that the textile industry should not be viewed merely as a consumer of cotton but as a collaborative partner in research and development initiatives. He also recommended forming an independent monitoring commission comprising agricultural experts, farmer representatives, and relevant institutions to ensure that cotton revival policies translate into tangible results rather than remaining confined to paper. Copyright Business Recorder, 2025
