PD uncertain on power tariff changes from July 1
ISLAMABAD: The Power Division stated on Friday that it currently has no definitive estimate of whether electricity tariffs for distribution companies (Discos) will increase or decrease from July 1, 2025, as this depends on the approval of cost components already submitted to the regulator.
These remarks were made by Additional Secretary (Power Finance) Mehfooz Bhatti during a public hearing on the interim distribution and supply tariffs of eight Discos for FY 2025-26 under the Multi-Year Tariff (MYT) regime. The statement came in response to a query raised by textile sector representative Aamir Sheikh.
Eight Discos—GEPCO, QESCO, MEPCO, SEPCO, HESCO, PESCO, TESCO, and HAZECO—have submitted tariff petitions under the MYT framework for the five-year period from FY 2025-26 to FY 2029-30, seeking National Electric Power Regulatory Authority (NEPRA)'s approval of a combined revenue requirement exceeding Rs 455.6 billion for the upcoming fiscal year.
'I have no indication at all of what the industry tariff will be from July 1, 2025,' said Aamir Sheikh. 'Our tariff for B3 has dropped to Rs 31/32 (about 11 cents) per unit currently, and the government has committed to reducing it further. We have already booked export orders for the next quarter based on these rates. It's imperative for NEPRA, the Power Division, and the Government of Pakistan to ensure tariffs do not increase beyond May/June levels.'
The hearing was briefly suspended by NEPRA Chairman Waseem Mukhtar, who demanded representation from a senior Power Division official. Mehfooz Bhatti eventually joined the session, replacing the Joint Secretary, whose presence NEPRA deemed insufficient.
Bhatti, who liaises directly with the Finance Division on power sector subsidies, appeared uncertain regarding the projected tariff changes. 'There is an indication of Rs 250 billion in the budget for Targeted Distribution Subsidy (TDS) for 2025-26. We've already presented seven scenarios to the Regulator. Once the distribution margins are determined under MYT, we'll be in a better position to outline consumer tariffs after incorporating the government's subsidy. At this point, I can't provide figures, but rebasing will take effect from July 1, 2025,' he said.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) strongly opposed any additional financial burden on consumers for the losses incurred by Discos under the MYT, until comprehensive reforms are implemented. The FPCCI argued that the burden of inefficiencies—including high technical and commercial losses, pension liabilities, and poor governance—is being unfairly transferred to consumers.
Rehan Jawed from Karachi raised concerns about the poor performance of Hyderabad Electric Supply Company (HESCO), prompting NEPRA to announce that a verification team will visit HESCO upcoming Monday to investigate consumer complaints.
Tanveer Barry of the Karachi Chamber of Commerce and Industry (KCCI) criticized Discos for rising losses due to operational inefficiencies, stating that consumers across Pakistan are unfairly burdened with the DSS surcharge on Power Holding Limited (PHL) loans.
'Discos' technical and commercial losses are worsening, and their recoveries fall short of NEPRA's targets. They haven't submitted investment and distribution plans, and the MYT submissions are incomplete,' Barry said. He emphasized that with power generation capacity projected to increase to 46,605 MW, resulting in higher capacity payments, the Time of Use (ToU) mechanism for industrial consumers should be abolished. He also called for third-party audits of Disco losses to present an accurate picture to NEPRA.
CEOs and CFOs of the eight Discos presented details of their proposed distribution margins and expenditures.
According to the tariff petition, GEPCO has sought approval of revenue requirement of Rs 67.821 billion of which Rs 16.598 billion is on account of pay & and allowances, Rs 13.815 billion post-retirement benefits, other expenses Rs 4.909 billion (total O&M cost Rs 43.446 billion), depreciation Rs 4.792 billion, RORB Rs 8.750 billion and other income negative Rs 5.418 billion other income and Prior Year Adjustment (PYA) Rs 24.375 billion.
MEPCO has sought NEPRA's approval for revenue requirement of Rs 139.106 billion of which, pay and allowances are Rs 22.302 billion, post-retirement benefits Rs 29.384 billion, repair and maintenance, Rs 7.869 billion, travelling allowance Rs 1.936 billion, vehicles maintenance, Rs 1.161 billion, other expenses Rs 507 million (total O&M cost Rs 79.653 billion), depreciation Rs 4.792 billion, RORB Rs 8.750 billion, other income negative Rs 8.731 billion and Prior Year Adjustment Rs 79.453 billion.
QESCO's total proposed revenue requirement for FY 2025-26 is Rs 50.120 billion which includes, pay and allowances Rs 9.947 billion, post-retirement benefits, Rs 3.044 billion, repair and maintenance, Rs1.496 billion, travelling allowance, Rs 1.936 billion, vehicles maintenance, Rs 797 billion, other expenses Rs 1.356 billion, (total) O&M cost Rs 17.100 billion), depreciation, Rs 2.944 billion, RORB Rs 15.696 billion, other income negative Rs 1.950 billion and PYA Rs 16.298 billion.
SEPCO has sought total revenue requirement of Rs 58.053 billion, of which O&M cost is Rs 22.226 billion, Distribution Margin/Supply Margin, Rs 25.3032 billion, PYA Rs 25.522 billion.
TESCO's revenue requirement for FY 2025-26 is estimated to be Rs 7.303 billion of which Rs O& M expense is Rs3.883 billion and DM/SM Rs 5.629 billion.
PESCO's total revenue requirement for FY 2025-26 is Rs 81.449 billion which includes O&M expense Rs 37 billion, DM/ SM- Rs 52 billion and PYA Rs 29.344 billion.
Hazara Electric Supply Company (HAZECO) which has been bifurcated from PESCO also presented its one-year revenue requirement.
HESCO's total revenue requirement for FY 2205-26 is Rs 39.448 billion of which O& M expense is Rs 25.130 billion, DM/SM Rs 33.693 billion and PYA Rs 5.755 billion.
HESCO's total revenue requirement is Rs 12.320 billion for the FY 2025-26, which includes O&M Rs 7.883 billion, depreciation, Rs 831 million, RORB Rs 3.028 billion, advance tax Rs 1.129 billion and other income negative Rs 550 million.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
100,000 sanitary workers to get reward money
LAHORE: Reward money announced by Punjab Chief Minister Maryam Nawaz will be distributed among more than 100,000 workers of the Suthra Punjab Programme on June 21 (today) for their performance during the grand operation on Eid-ul-Azha. In this regard, a ceremony will be held at the tehsil level across Punjab in which the workers will be invited. This decision was taken during a meeting that was chaired by Punjab Local Government Minister Zeeshan Rafiq on Friday. Punjab Local Government Secretary Shakeel Ahmed Mian, Special Secretary Asia Gul, Additional Secretary Ahmer Kaifi, Deputy Commissioners and chief officers of municipal bodies were also present. The Minister said that instead of calling all the workers on the same day, if necessary, the reward money can be distributed among the remaining people on the next day. He said the Chief Minister had announced the reward of Rs 10,000 each for over 100,000 workers who worked hard and with commitment during the hot weather on the Eid days. 'The workers worked hard during the scorching sun, and thus we saw exemplary cleanliness on Eid-ul-Azha. Hence, the Punjab government announced the reward to recognise the hard work put in by the workers,' he added. He directed the officials concerned to invite elected representatives to the ceremonies, observing that public representatives also played a full role in the awareness campaign during the grand operation. On this occasion, the Secretary said that bank drafts will be transparently given to the workers, adding that no worker of the Clean Punjab Programme should be deprived of the prize money. Copyright Business Recorder, 2025
Business Recorder
2 hours ago
- Business Recorder
NA panel approves bringing over Rs10m pension into tax net
ISLAMABAD: National Assembly Standing Committee on Finance and Revenue Friday granted approval for bringing over Rs 10million pension into the tax net at a rate of 5 percent. Taking part in discussion, MNA Muhammad Jawed Hanif Khan stated that it seems that this move would bring all pensionable amounts into the tax net in the future. He was of the view that there might be a limited number of people, and probably Judges of the higher courts would come into the tax net. The NA Panel also discussed the FBR's proposal for the deduction of the tax amount after the decision of the High Court. The Parliamentarians belonging to PPP and PTI opposed this proposal and argued that it was an infringement of the right of appeal of the taxpayer, as the FBR should not withdraw the money from the account of the taxpayer soon after getting a favourable decision from the High Court. Chairman FBR, Rashid Mahmood Langrial, made all-out efforts to convince the members of the NA Panel and stated that the tax amount was proven at three to four forums, and after proving the case in favour of the FBR the tax amount was secured from the taxpayers. The Parliamentarians were of the view that the due tax amount should only be drawn after exhausting all forums, including the Supreme Court of Pakistan. The Chairman of the Committee instructed the FBR to come up with a second thought and revised draft on the piece of legislation in the finance Bill; otherwise, in the existing shape, the committee would reject such powers from the FBR. The NA Panel also approved amendments proposed in the Income Tax in the Seventh Schedule, which provides special treatment for the banking sector. The FBR has proposed five amendments for disallowing banks from incorporating expenses from the payment of taxes, including the rented building of banks and advances to Non-Performing Loans (NPLs). Copyright Business Recorder, 2025
Business Recorder
2 hours ago
- Business Recorder
PKI urges govt to set up Agri Price Commission, Agri Export Authority
LAHORE: Pakistan Kissan Ittehad (PKI) has urged the government to establish an Agricultural Commodities Price Commission to ensure a transparent pricing mechanism that guarantees farmers at least a 25 percent return on their investment. In addition, PKI also called for the creation of an Agricultural Export Authority to stabilize domestic prices and promote sustainable marketing of surplus produce. PKI President Khalid Mahmood Khokhar made these demands while speaking to journalists the other evening. He also called for the removal of the 18 percent GST on seed cotton, the abolition of GST on tractors and related implements, and the introduction of a uniform electricity tariff of Rs 10 per unit for irrigation tube-wells. 'Without urgent reforms, experts warn that Pakistan's agricultural sector, which remains the backbone of its economy is on an accelerating downward spiral, with far-reaching consequences for food security, economic resilience, and social stability,' he remarked. Reacting to the Punjab budget, he criticized the mere 10.75 percent increase in agriculture allocations, arguing that it reflects either a gross underestimation of the crisis facing the sector or a deliberate attempt to downplay its severity. 'Despite these alarming signals, the Government of Punjab has allocated only Rs 129.8 billion for agriculture in the 2025–26 budget a modest 10.75 percent increase from last year's Rs 117.2 billion. In the face of a multi-trillion-rupee crisis, this nominal increment of Rs 12 billion is widely seen as inadequate and dismissive of the sector's plight,' said PKI President Khalid Mahmood Khokhar. Adding to farmers' concerns is the government's proposal to tax agricultural income; a move many believe demonstrates a profound disconnect from the economic hardships currently faced by the farming community. Applying tax slabs designed for stable corporate businesses to climate-affected farmers struggling with water scarcity could prove disastrous. Such a policy risks deepening rural poverty, discouraging investment, and further destabilizing an already fragile sector, he warned. The affordability crisis among farmers has reached critical levels. A steep decline in fertilizer usage, particularly urea and DAP along with a significant drop in tractor sales, indicates that farmers are unable to invest during the current Kharif season. The prospect of declining cotton yields is increasing, and the potential impact on the upcoming Rabi wheat crop is also cause for concern. If this downward trend continues, it could trigger a dangerous food security emergency. Khokhar pointed out that Pakistan's agricultural sector is in deep crisis, with growth plunging by 5.84 percent over the past year, and major crop production shrinking by more than 13 percent. Agricultural exports have also sharply declined in 2024–25, laying bare the sector's deep structural weaknesses. Maize exports fell by a staggering 86 percent to just USD 58.9 million, while rice exports dropped by 15 percent to USD 3.3 billion. Copyright Business Recorder, 2025
