Latest news with #ElectricityDuty
Business Recorder
7 days ago
- Business
- Business Recorder
Discontinuation of ED collection opposed: KP govt urges Power Division to reconsider decision
ISLAMABAD: The federal government's plan to discontinue the collection of Electricity Duty (ED) has hit another roadblock as the Khyber Pakhtunkhwa (KP) government has formally opposed the move, following the earlier objection by the Sindh government. The KP government has urged the Power Division to reconsider the decision in the interest of constitutional propriety, cooperative federalism, and fiscal stability. In response to a letter dated June 30, 2025, from Federal Minister for Power Sardar Awais Khan Leghari, KP Chief Minister Ali Amin Gandapur conveyed strong reservations regarding the unilateral discontinuation of ED collection by the Power Division through Distribution Companies (Discos), without prior notice or consultation. Leghari urges chief ministers to scrap electricity duty from bills starting July Gandapur highlighted the constitutional and legal basis for the imposition of Electricity Duty: (i) under Article 157(2)(b) of the Constitution of Pakistan (1973), provincial governments are empowered to levy taxes on electricity consumption within their jurisdictions ;(ii) according to Section 13(2) of the KP Finance Act, 1964, every distribution licensee is obligated to collect and remit Electricity Duty to the provincial government. This duty constitutes a first charge on the amount recoverable for energy supplied, thereby making it a debt owed to the KP government; and (iii) Rule 5(1) of the West Pakistan Electricity Duty Rules, 1964 requires Discos to list Electricity Duty as a separate item on electricity bills and recover it alongside energy charges. He further argued that under Section 38 of the NEPRA Act (1997), provinces are authorized to monitor Discos' compliance regarding billing, metering, and theft cases. The Act also affirms the provincial government's jurisdiction over electricity consumption charges based on the principle of subsidiarity. Gandapur pointed out that under Section 36(2) of the State-Owned Enterprises (SoE) Act, 2023, all previous orders, regulations, and instruments remain in force unless repealed. Thus, the KP Finance Act, 1964 and the Electricity Duty Rules, 1964 continue to hold legal standing. He also referenced Articles 268 and 279 of the Constitution, which provide continuity to existing laws, including taxation statutes, until altered by the appropriate legislature. These protections, he argued, reinforce the provinces' legal right to collect ED. The chief minister emphasized that under Article 154(1) of the Constitution, the Council of Common Interests (CCI) is the designated body to formulate and regulate policies related to electricity and oversee related institutions. Therefore, any decision affecting the power sector must be considered and approved by the CCI, with mandatory consultation from the provinces—a process that was not followed in this case. He noted that three distribution companies—PESCO, HAZECO, and TESCO—operate within KP's jurisdiction and are legally bound to comply with provincial laws, under the principle of lex situs (the law of the place where the property is situated). The ED, he added, must be collected through the billing system as mandated by law, and there exists no alternate mechanism for its recovery. 'The Power Division's unilateral administrative decision, without CCI's approval or consultation with the KP government, is unconstitutional and legally void,' Gandapur asserted. 'This measure may unnecessarily fuel federal-provincial tensions.' The KP government maintains that ED is not a general tax that can be collected through alternative channels, but rather a sector-specific charge that, by law, must be recovered via electricity bills issued by Discos. The provincial government has sought immediate reconsideration of the decision of Power Division, expressing readiness for constructive dialogue, provided the constitutional and legal frameworks are upheld. Earlier, Sindh Chief Minister Murad Ali Shah also criticized the federal government, accusing Islamabad of imposing a unilateral decision and advising it to 'put its own house in order' before dictating terms to the provinces. Currently, Discos collect an estimated Rs 60 billion annually as Electricity Duty on behalf of the provinces. While the federal government claims the move is intended to provide relief to consumers, provincial governments argue it undermines their constitutional right. Power Minister Sardar Awais Leghari has stated that he will present the collective responses of all provinces to the prime minister before deciding on a future course of action. Copyright Business Recorder, 2025
Business Recorder
02-07-2025
- Business
- Business Recorder
DISCOs and KE: Nepra approves revised average uniform SoT
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday approved, in principle, a revised average uniform Schedule of Tariff (SoT) of Rs 31.59/kWh for power Distribution Companies (DISCOs) and K-Electric (KE) for FY 2025-26, amid serious concerns on the performance of Discos. The revised new tariff has been set at Rs 31.59/kWh, down from Rs 32.73/kWh, with an average reduction of Rs 1.14/kWh following the incorporation of a Tariff Differential Subsidy (TDS) of Rs 250 billion for the fiscal year 2025–26. Additionally, Nepra announced a reduction in the uniform average tariff from Rs 35.50/kWh to Rs 34/kWh, indicating an overall decrease of Rs 1.50 per unit. Uniform tariff: govt formally moves Nepra The Authority, comprising Member (Tech) Rafique Ahmad Shaikh, Member (KPK), Maqsood Anwar Khan (Development) officiated in the hurriedly convened public hearing. Power Division was represented by Additional Secretary (Power Finance) Mehfooz Bhatti and Naveed Qaiser from PPMC (Power Planning and Monitoring Company) shared information about rebasing of power tariff and responded to the questions raised during the hearing. According to the documents shared with NEPRA, all categories of consumers will get a relief of Rs 1.15/kWh (average Rs 1.14/kWh). However, the representative of Power Division avoided accepting that tariff relief of Rs 7.50/kWh announced by the Prime Minister is over. He argued that the relief in tariff which will end from June 2025, will be replaced with reduction in base tariff by Rs 1.15 per unit, Rs 0.45 per unit through elimination of PTV fee and Rs 0.90 per unit through discontinuation of Electricity Duty by provinces. 'The government's uniform average tariff is Rs 31.59/kWh for FY 2025-26 against Nepra's determined rate of Rs 34 per unit,' Naveed said requesting Nepra to allow the proposed new rebased uniform tariff so that reduced tariff is passed on to the consumers. During the public hearing, representatives from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and K-Electric raised several concerns. Rehan Jawed (FPCCI) demanded that industrial tariff be redesigned in consultation with industry as current industrial tariff mechanism is flawed. He requested Nepra not to approve Government's Motion of uniform tariff in current form as industry opposes it in its entirety. Director Finance KE, Ayaz Jaffer urged Nepra to ensure that KE's tariff is adjusted in line with the latest determinations. The representative of Power Division noted that federal government has challenged Nepra's tariff determinations of KE; and suggested that as per TDS agreement between GoP and KE, the latter has legal permission to file TDS claims as per latest determinations. Nepra's legal counsel, Mian Ibrahim stated that the Power Division has no legal authority to override Nepra's tariff decisions. Meanwhile, Arif Bilwani criticized Nepra for scheduling the hearing on a public holiday, arguing that it restricted public access and transparency, especially for consumers. One of the key concerns discussed was the tariff structure post July 1, 2025, particularly the expiration of the Prime Minister's Rs 7.50/kWh relief package. According to Aamir Sheikh, representing the industrial sector, the net reduction from the new tariff is only Rs 1.15/kWh, whereas the PM's Rs 6/kWh relief ended in June, and an additional Rs 1.55/kWh relief will expire in July. This implies that despite the official reduction, industries may face a net increase of Rs 5/unit, potentially rendering their operations financially unsustainable. Sheikh called on the Prime Minister to allocate funds from the Carbon Levy on furnace oil and the gas levy to continue providing relief in electricity tariffs for the industrial sector. Tanveer Barry representative from KCCI said that he was attending the hearing as a protest because only one day was given for preparation, and suggested that Nepra should give 7 days for comments. He contended that on the one hand Rs 1.15/kWh relief was not enough while on the other hand government imposed Rs 3.23/kWh circular debt surcharge. 'The government had announced that after negotiations with IPPs consumers will get a big relief next fiscal year but no big relief is seen. Nepra should reduce fixed charges. Peak hours and off peak should be abolished so that industry may be run 24 hours at the same tariff,' he continued. Regarding net metering 1MW cap on industrial export should be lifted. This will allow discos to procure cheaper electricity and improve their average cost of supply while promoting clean energy. New industrial connections or load enhancement should be processed within 30 days. Member (Tech) expressed serious concerns on the performance of Discos especially fudging in meter reading to recover inflated bills. He said, inquiries of Discos have been conducted on this issue and currently an inquiry is in process against SEPCO. Dr. Kashif, CEO PITC informed the hearing that the purpose of 'Apna Meter, Apni Reading' App is to get rid of overbilling in Discos. On the issue of solarization, the representative of Power Division, sought Nepra's support in sorting out this issue as other consumers are paying for the cost of net metering consumers. Copyright Business Recorder, 2025
Business Recorder
01-07-2025
- Business
- Business Recorder
‘No electricity duty' decision: Minister reaches out to all CMs
ISLAMABAD: Federal Minister for Power Division, Sardar Awais Ahmed Khan Leghari has written letters to all the chief ministers about the decision to discontinue the collection of electricity duty through electricity bills starting July 2025. In his letters, the federal minister sought support of all the chief ministers in removing complexity arising from multiple charges, taxes, and duties being collected through consumer bills. He said that high electricity tariffs are already a significant challenge, and the additional burden of various levies further complicates the billing structure, making it difficult for consumers to understand and manage their electricity costs. Power smart app introduced to get rid of over-billing The federal minister in his letters highlighted the federal government efforts regarding various measures to reduce power tariffs, including renegotiating Independent Power Producer (IPP) contracts, lowering the Return on Equity (ROE) for government-owned power plants, and implementing other structural reforms. He said in parallel, we are also committed to simplifying electricity bills so that they primarily reflect the actual cost of power consumption rather than serving as a collection mechanism for various additional charges. Leghari in his letter wrote that to achieve this objective, we are considering the removal of non-electricity-related charges from consumer bills. 'As part of this initiative, the Power Division has decided to discontinue the collection of Electricity Duty through electricity bills starting from July 2025. We request provincial governments to explore alternative mechanisms for collecting provincial levies and duties, rather than relying on electricity bills as a collection channel.' He expressed the confidence that this will not only make electricity bills more transparent and easier to comprehend but also ensure that consumers are paying only for the cost of electricity, rather than a mix of other charges. The federal minister also sought cooperation of all the chief ministers in identifying and implementing alternative revenue collection methods instrumental in making this initiative a success. Copyright Business Recorder, 2025
Express Tribune
30-06-2025
- Business
- Express Tribune
Govt to end collection of electricity duty via bills
Listen to article Energy Minister Awais Leghari has written letters to all chief ministers regarding the decision to discontinue the collection of Electricity Duty through electricity bills starting from July 1, 2025. In his letters, the federal minister sought the support of all chief ministers in removing the complexities arising from multiple charges, taxes, and duties being collected through consumer bills. He stated that high electricity tariffs are already a significant challenge, and the additional burden of various levies further complicates the billing structure, making it difficult for consumers to understand and manage their electricity costs. The minister also highlighted the federal government's efforts to reduce power tariffs, including renegotiating Independent Power Producer (IPP) contracts, lowering the Return on Equity (ROE) for government-owned power plants, and implementing other structural reforms. Minister for Power Sardar Awais Ahmed Khan Leghari has written letters to all provincial Chief Ministers about decision to discontinue collection of Electricity Duty through electricity bills from next month@MoWP15 #News #RadioPakistan — Radio Pakistan (@RadioPakistan) June 30, 2025 "In parallel, we are also committed to simplifying electricity bills so that they primarily reflect the actual cost of power consumption, rather than serving as a collection mechanism for various additional charges," he added. Leghari wrote that, to achieve this objective, the Power Division is considering the removal of non-electricity-related charges from consumer bills. 'As part of this initiative, the Power Division has decided to discontinue the collection of electricity duty through electricity bills starting from July 2025. We request provincial governments to explore alternative mechanisms for collecting provincial levies and duties, rather than relying on electricity bills as a collection channel,' he stated. He expressed confidence that this move will not only make electricity bills more transparent and easier to comprehend, but ensure that consumers only pay for the cost of electricity, rather than a mix of other charges. Energy minister also sought the cooperation of all chief ministers in identifying and implementing alternative revenue collection methods, which will be instrumental in making this initiative a success.
Business Recorder
30-06-2025
- Business
- Business Recorder
Leghari urges chief ministers to scrap electricity duty from bills starting July
Federal Minister for Power Sardar Awais Ahmed Khan Leghari has written to all chief ministers, urging them to abolish the collection of Electricity Duty through electricity bills from July 2025, the Power Division said in a statement on Monday. In his letters, Leghari called for provincial support in simplifying electricity bills by removing multiple taxes and duties that make billing complex and burdensome for consumers. 'High electricity tariffs are already a significant challenge,' he wrote, adding that additional levies further complicate the billing structure and hinder consumer understanding of actual power costs. Power smart app introduced to get rid of over-billing The minister highlighted federal efforts to reduce power tariffs, including renegotiation of Independent Power Producer (IPP) contracts, lowering the return on equity (ROE) for government-owned power plants, and structural reforms aimed at improving the overall efficiency of the sector. 'To make electricity bills more transparent and easier to comprehend, the Power Division has decided to discontinue the collection of Electricity Duty through power bills from July 2025,' the letter stated. 'We request provinces to explore alternative mechanisms for collecting their respective levies.' Pakistan's power generation increases 21% in May He expressed confidence that the move would help consumers better understand and manage their electricity expenses and emphasized that bills should reflect only the actual cost of consumption. The minister also called on provinces to propose and implement alternate revenue collection strategies to ensure the successful execution of this reform.
