ISLAMABAD: The Government’s Winter Incentives Package has reportedly failed to achieve the desired results in the industrial sector, as most of the closed units did not receive any relief due to a “faulty” formula used to calculate their bills.
This issue was brought to the attention of the Minister for Power, Sardar Awais Khan Leghari, following his appointment during a recent reshuffle. Aamir Sheikh of North Star Textiles Limited, part of the Zaamin Group, highlighted the concern in a letter to the Minister.
In the letter, Sheikh explained that the purpose of the Winter Package was to encourage increased electricity consumption. However, in its current form, the package has neither significantly increased consumption nor helped industries that had closed due to high tariffs and were aiming to restart production. The main issue, according to Sheikh, is that an unjust formula was applied to consumers who had zero consumption in any of the last three years, making them ineligible for the benefit.
For example, an industrial unit with a sanctioned load of 5MW (B3) that had been closed due to losses, with a billing history of 2,000,000 units in December 2021, 1,000,000 units in December 2022, and zero units in December 2023 (when it was closed), had its December 2023 units calculated using 60% of its sanctioned load instead of zero. The formula was intended for cases where records were missing (due to meter faults, etc.), but it was unfair to apply it to months with actual zero consumption.
“If an industry was shut down due to losses, how can its consumption be arbitrarily increased to 60% of its sanctioned load, which it wasn’t even using when it was operational?” Sheikh said. “In this case, December 2023 units were calculated as 60 x 5000 x 24 x 31 = 2,232,000 units instead of zero.”
The consumer believes that, because the benchmark used was the higher of the 2023 consumption or the average of 2021, 2022, and 2023, the arbitrarily calculated 2,232,000 units were used, and the industry did not benefit from the Winter Package. “The closed industry was not activated, and an opportunity to increase exports and employment was lost,” Sheikh added.
He further stated that if the unit had consumed even a single unit, that consumption would have been used in the calculation instead of the 2,232,000 units, and the industry would have qualified for incremental relief.
The industrial consumer has requested that, in future cases like this, the actual recorded consumption of zero be used. “In that case, the benchmark would be 50% x 0 + 30% x 1,000,000 + 20% x 2,000,000 = 700,000 units,” he explained. “With a 25% cap on incremental units, even with this benchmark, the package cannot be misused.”
“By using a distorted benchmark for closed industries, the purpose of the package was defeated. The most deserving closed units received no relief, even though they still had to pay high bills due to the 50% minimum MOI billing rule. If the package is extended, we request that this calculation method be revised,” Mr. Sheikh concluded. Ends
