Latest news with #SardarAwaisLeghari
Arab News
6 days ago
- Business
- Arab News
Pakistan energy minister says net metering to be reformed, not scrapped
KARACHI: Pakistan will not abolish its solar net metering policy but is working to reform the mechanism to make it more 'transparent and sustainable,' Energy Minister Sardar Awais Leghari said on Wednesday. Net metering allows consumers to generate electricity through solar panels and sell excess power back to the national grid, receiving credits or monetary compensation in return. The policy was introduced in 2017 to promote renewable energy and ease pressure on the national grid. 'The government is not abolishing net metering but is considering changing its current mechanism to a more effective, transparent and sustainable model,' the Ministry of Energy's Power Division said in a statement. The minister said the expansion of net metering was now impacting the national grid and reforms were needed to address this in a 'timely manner.' Pakistan's current policy pays Rs21 per unit of solar electricity, resulting in a government subsidy of Rs1.90 per unit, according to the energy ministry. Officials say the cost is ultimately borne by domestic and industrial consumers, effectively subsidizing wealthier users who can afford to install solar panels. Leghari said the government may align the solar purchase rate with overall energy procurement prices, allowing it to adjust with market fluctuations. However, he stressed that the aim was not to eliminate incentives. 'We are not saying that net metering consumers should provide us with electricity at the rates of the cheapest sources of electricity,' Leghari said. 'These reforms are not a deterrent, but a step toward a better, balanced and sustainable system.' He said the typical payback period for solar investments in Pakistan was around three years, provided that consumers use 40 percent of the electricity they generate. Leghari also said the government was in discussions with the International Monetary Fund about the scheme but stressed 'there is no direct financial pressure on us.' In a post on social media platform X, formerly Twitter, Leghari said the government was reviewing all stakeholder proposals and would not take steps that harmed businesses. 'We strongly hope that any changes in these regulations will be in the best interest of all stakeholders, the national grid and the electricity consumers of Pakistan,' he said. In January, Leghari called for a review of the net metering policy, saying it was becoming financially unsustainable. A government report from last year said the existing net metering framework had shifted a burden of Rs103 billion ($366 million) onto other electricity consumers in 2024. Pakistan has set a goal of generating 60 percent of its electricity from renewable sources by 2030 and cutting projected carbon emissions by 50 percent. But the country remains far behind on those targets, despite growing solar adoption and abundant sunlight across most regions.
Business Recorder
12-05-2025
- Business
- Business Recorder
Tariff anomalies: PTEA seeks rectification among industrial consumer categories
ISLAMABAD: Pakistan Textile Exporters Association (PTEA) has sought rectification of tariff design anomaly between B-2, B -3 and B-4 industrial consumer categories based on voltage level, system losses and metering configuration. In a letter to different ministers including Commerce Minister, Jam Kamal and Power Minister, Sardar Awais Leghari PETA has shared critical structural anomaly in the industrial electricity tariff design recently notified by NEPRA. According to the Association, the current tariff structure contradicts standard grid cost principles and unintentionally dis-incentivizes industrial consumers from investing in high-voltage grid connections, which are otherwise more efficient and economical for the system. Pakistan Electricity Review 2025 launched As per the current NEPRA tariff applicable from July 1, 2024, the off-peak variable energy charges are as follows: (i) B2 (400V): Rs. 28.56/kWh ;(ii) B3 (11 kV): Rs 29.39/kWh; and (iii) B4 (132 kV): Rs. 29.11/kWh. According to technical analysis, industry feedback and research, this tariff design is counterintuitive and regressive as standard cost-of-service methodology prescribes lower tariffs for higher-voltage connections due to reduced distribution and transformation losses, avoidance of LT infrastructure and utility O&M and improved grid load profile and reactive power management. PETA maintains that despite these benefits, B3 and B4 consumers are being charged higher rates than B2, even though they bear full capital and O&M costs of their own internal power systems while providing low-loss load to the grid. There is also metering disparity and system responsibility as B2 and B1 consumers are metered after the transformer, meaning utility bears transformer losses and LT O&M whereas B3 and B4 consumers are metered at the HT terminals, and maintain their entire downstream infrastructure independently. This fundamental difference means B3/B4 consumers relieve the utility of significant cost burden-yet are penalized with higher rates. Another factor is distorted industrial behaviour and technical losses. This anomaly has triggered non-technical bifurcation of industrial load. Large industries are splitting sanctioned loads across multiple B2 (LT) connections to avoid the B3/B4 tariff. This leads to inefficient grid expansion, higher technical losses due to LT delivery, reduced network visibility for DISCOs, revenue losses and fragmented billing. In advanced energy systems, HT consumers are incentivized through lower tariffs. Examples from India, Bangladesh, and past WAPDA practices show HT industrial users are charged 10-15% less per kWh than LT consumers, ensuring system efficiency and stability. PETA has submitted the following recommendations ;(i) tariff rationalization so that B3 and B4 industrial consumers are provided a minimum Rs. 2/kWh discount compared to B2 ;(ii) incorporate voltage level, metering point, and network ownership into industrial tariff design, consistent with engineering and cost-of-service principles; and (iii) introduce regulatory disincentives for industrial consumers operating multiple B2 connections when a B3/B4 interconnection is technically feasible. 'This realignment will reduce system losses, improve grid utilization, promote technically sound industrial expansion, and enhance DISCO financial performance without requiring additional subsidies,' said Khurram Mukhtar, Pattern In-Chief PETA. Copyright Business Recorder, 2025
Express Tribune
16-03-2025
- Business
- Express Tribune
Govt trades cheaper petrol for power relief
Prime Minister Shehbaz Sharif on Saturday raised the petroleum levy by Rs10 per litre – a 17% hike – to Rs70 per litre, keeping petrol and diesel prices unchanged, while using the available additional fiscal space to reduce electricity prices by roughly Rs1.50 per unit. Despite the increase, the ex-depot petrol price will remain at Rs255.63 per litre, while high-speed diesel will stay at Rs258.64 per litre, according to officials from the finance and energy ministries. The government opted not to pass on the reduction in global oil prices to consumers, which was due on March 16. The total reduction in electricity prices is expected to be more than Rs1.50 per unit, with the prime minister planning to announce the relief on March 23. On the summary of the finance ministry, the prime minister approved to increase the petroleum levy rates by Rs10 per litre to Rs70. The additional Rs10 per litre will be used to reduce the electricity prices by about Rs1.50 per unit. "We have decided to maintain petroleum prices at their current levels and transfer the full financial benefit to the public by reducing electricity prices," the prime minister said. The premier added that this measure is one of many aimed at achieving a meaningful reduction in electricity tariffs. "This step is among several others that will lead to a significant reduction in electricity prices." The residential consumers are forced to pay over Rs65 per unit electricity price which is the direct outcome of Rs18 per unit idle capacity payments, hefty cross subsidy being charged from users of over 300 monthly consumption and building the cost of inefficiency and theft in the power rates. The PM has tasked his power minister Sardar Awais Leghari to come up with a tangible proposal to reduce the prices in the range of Rs6 to Rs7 per unit. The trade-off between petrol and electricity prices is being done to address an issue of high electricity bills, which is hurting every household and the industry, said Federal Minister for Petroleum Ali Pervaiz Malik while talking to The Express Tribune. Ali noted that while petrol in Pakistan was among the cheapest in the region, electricity was the most expensive, which the prime minister is trying to rebalance. The Express Tribune reported on Saturday that the International Monetary Fund (IMF) had allowed Pakistan to increase petroleum levy to Rs70 per litre and use the funds to reduce power prices. The levy has been increased to absorb price reduction. The prime minister said that a comprehensive and effective strategy is being prepared under which an electricity package is being developed to reduce electricity prices and the details are being finalised. The government has estimated earning about Rs180 billion per annum from the additional levy, which it will use to reduce electricity prices by about Rs1.50 per unit. The government officials said that the total reduction in the electricity prices will be higher than this after availing the fiscal space on account of negative fuel price adjustment claims of the previous months. The government also tried to convince the IMF to lower the GST rate on electricity bills to reduce prices but the Fund did not agree. According to a comparison by the government, at US dollar parity, the petrol price in Pakistan is 91 cents compared to 1.15 dollars in India, 1.26 dollars in Sri Lanka and 1.04 dollars in Bangladesh. However, a key reason behind the higher price in dollar terms in neighbouring countries is that their currencies are stronger relative to a weaker rupee. Likewise, the diesel price in Pakistan in dollar terms is 92 cents while it is $1.03 in India, $1.12 in Sri Lanka and 86 cents in Bangladesh. Pakistan's per capita income is also lower than its regional peers, which limits its citizens' ability to pay high prices for fuel and electricity. Petrol is mainly used in private transport, small vehicles, rickshaws, and two-wheelers, and it directly affects the budget of the middle and lower middle classes. Most of the transport and agriculture sectors run on high-speed diesel. After the fresh increase, the total taxes on the petrol have increased to about Rs86 per litre. The government will now charge Rs70 per litre petroleum levy besides 10% excise duty at the import stage. The financial space created by changes in global oil prices and other measures will be used to provide significant relief to the public through reduced electricity costs, the prime minister stated. He reiterated his government's commitment to prioritising public relief since taking office. As per the decision of the government, the oil prices will remain the same up to the end of the current month. The per litre price of petrol will remain at Rs255.63, high-speed diesel Rs258.64, kerosene oil Rs168.13 and light diesel oil at Rs153.34. On the other hand, the work submitted to the petroleum division by the industry a few days back showed relief in the price of petroleum products up to Rs14.16 per litre in line with a reduction in global oil prices. The work by the industry showed that ex-depot prices of petrol could drop by Rs14.16 per litre and the same for diesel was projected to drop by Rs8.70 per litre. A cut of cut of Rs10.33 per litre was calculated in the price of kerosene oil while Light diesel oil could have to dropper by Rs. 7.12 per litre.
