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SC orders govt to 'fix' POL, electricity prices

11 December, 2013

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ISLAMABAD: Announcing judgement in a suo motu case regarding unprecedented load shedding and increase in petroleum and electricity prices in the country, the Supreme Court (SC) has ordered OGRA to take necessary steps to fix petroleum prices in accordance with international market.

Delivering the 38-page judgement, a three-member bench of the court, headed by Chief Justice of Pakistan (CJP) Iftikhar Muhammad Chaudhry Chaudhry, said, "Prices of petrol, diesel, petroleum products, etc are invariably being fixed by OGRA without taking into consideration the rate in the international market. Therefore, in future, all necessary steps shall be taken in this behalf to fix the prices strictly in accordance with the prevailing rates in the international market."

Regarding load shedding of electricity, the bench directed the authorities concerned to focus their efforts on minimising the sufferings of consumers by endeavouring to provide uninterrupted supply of electricity on an equitable basis.

"The competent authority must concentrate its efforts to minimise the sufferings of the consumers by endeavouring to provide uninterrupted supply of electricity. If, however, load shedding is the only way out, it must be administered without having distinction between rural and the urban areas as well as domestic, commercial and industrial sectors. Moreover, a formula must be put in place to ensure the distribution of electricity on equitable basis," the verdict said.

The court also observed, "It seems that the government is interested in installing new projects which are costly and do not fulfil our requirements. If we use the existing resources, while giving priority to capacity building of hydroelectric power, we can overcome the scourge of load shedding."

It also noted that load shedding is a result of mismanagement or want of administrative control by relevant functionaries. The verdict said, "OGRA is directed to issue revised notification to recover only 16 percent or 17 percent sales tax as early as possible but not beyond the period of seven days and the extra sales tax shall be deposited by FBR within three months in the manner as was directed in the judgement and the matter shall be fixed before the court for issuing guidelines for its disbursement."

The court also said in its order that the competent authority should take steps to control all kinds of line losses by using modern devices like smart meters and "supplying electricity only to the consumers who are ready and willing to make payment, if need be, in advance or without any default after submission of the bills".

"As far as all kinds of unauthorised consumers are concerned, efforts should be made to persuade them to make payments of the bills, failing which action as envisaged under the Electricity Act, 1910, the Electricity Rules, 1937 and NEPRA Act, 1997 as well as other enabling laws/rules, should be taken," the judgement read.

The court said that a policy has to be announced by the NTDC/DISCOS under which the supply of electricity to the consumers who believe in law and make the payment in time is encouraged and supply of unauthorised consumers is discouraged.

"It is responsibility of NEPRA and PEPCO to reduce the prices while ensuring that electricity is generated through less-costing value of production from hydel power… and as far as thermal power is concerned, preference must be given to generate electricity using coal and gas."

The court said that renewable sources for generating electricity, including wind and solar power, must also be utilised.

Passing an order regarding supply of gas at subsidised rates to fertilisers companies, the court ruled, "As far as supply of gas at subsidised rates to fertiliser companies is concerned, it may continue but at the same time there must be a policy to ensure that fertilisers like urea is sold in the market to farmers at a subsidised rate... However, as far as captive power plants are concerned, the policy must be revised and without any justification they cannot be allowed supply of gas to produce electricity because they supply electricity at much higher than the NEPRA rate instead of subsidised rate to NTDC."


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