News

Public anger against inflated electricity bills prompts PM to call emergency meeting

Published

1 month ago

August 27, 2023

People in different parts of the country on Saturday expressed despair and anger at unprecedentedly high electricity bills with some threatening demonstrations and even a civil disobedience campaign if the extra taxes weren’t deducted.

The severe reaction led caretaker Prime Minister Anwaarul Haq Kakar to call an emergency meeting at the Prime Minister’s House tomorrow (Sunday).

“In the meeting, a briefing will be taken from the ministry of power and distribution companies and consultations will be held regarding giving maximum relief to consumers regarding electricity bills,” the premier said on X (formerly Twitter) today.

Last month, the power regulator raised the national average tariff by around Rs5 per unit, pushing the base unit power tariff from Rs24.82 to Rs29.78. On Aug 22, the government once again sought to raise the power rate by Rs3.55 per unit.

Hours after the interim PM’s announcement today, caretaker Minister for Information and Broadcasting Murtaza Solangi, along with Federal Secretary of the Power Division Rashid Mahmood Langrial, held a media briefing in Islamabad to explain the current state of electricity tariffs.

At the outset of the briefing with anchorpersons and bureau chiefs from various media outlets, the minister acknowledged the difficulties faced by the people due to the escalating electricity prices.

He said all stakeholders within the power sector would participate in the prime minister’s emergency meeting.

The Power Division secretary confirmed that the facility of free electricity units to officers of power distribution companies would be discontinued, insisting that the burden was not being transferred to regular bill-paying individuals.

Langrial explained that the National Electric Power Regulatory Authority (Nepra) determined electricity tariffs using three distinct methodologies, adding that the Rs5.40 per unit additional quarterly tariff adjustment (QTA) for April-June was meant for new power plants.

Moreover, he said electricity prices were subject to fluctuations based on the Consumer Price Index.

The secretary also elaborated on the necessity of tariff alterations due to the upsurge in the Karachi Inter-Bank Offered Rate or Kibor rate — which are quoted on a daily basis by a large number of banks to indicate the cost of borrowing and lending money for tenors ranging between one week and 3 years.

In addition to this, fuel price adjustments also impacted electricity costs, Langrial added.

The secretary said in the fiscal year 2023, the tariff was initially set at Rs195 per dollar, but the value of the dollar surged to Rs284.

“We initially aimed to set the price of RNLG (regasified liquefied natural gas which is used as fuel for electricity generation) at Rs3,183 per mmBtu, however, the actual price ranged between Rs3,000 and Rs3,800,” he said.

Similarly, the secretary said the price range for imported coal remained between Rs51,000 and Rs61,000 per metric tonne.

He further said that Rs2 trillion would be exclusively allocated to capacity payments in the upcoming year.

The secretary insisted that the increase in electricity tariffs predominantly affected consumers utilising more than 400 units, adding the tariff remained unchanged for 63.5 per cent of domestic consumers.

For 31.6pc of domestic consumers, he said electricity prices saw an uptick of up to Rs6.5 per unit, and a tariff of Rs7.5 per unit was only applied to 4.9pc of domestic consumers.

Langrial asserted that the average tariff increase for domestic consumers stood at Rs3.82.

In July 2022, the highest recorded electricity tariff was Rs31.02 per unit, he said, adding that by August 2023, the price had increased to Rs33.89 per unit.

The press conference was held against the backdrop of countywide protests against exorbitant electricity bills.

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In Rawalpindi, a large number of people protested at Rawalpindi’s Liaquat Bagh against the high electricity bills. They held banners and placards while chanting slogans against the local electricity provider.

“Our bill has doubled. I don’t have my bill in hand right now but this time our bill was Rs84,000. When I sent my son to get it fixed, they adjusted the bill to Rs54,000. If you are increasing this bill because the IMF asked you to do so, it is still wrong,” one protester said.

“There is no notification from the government and these Wapda and all [electricity suppliers] are increasing it at their own whim,” he added.

Another angry protester said: “Our next move will be a strike throughout the country from Karachi to Peshawar by the traders community.”

He added some protesters told him that if the taxes weren’t taken back, they would move towards Islamabad and start a civil disobedience campaign.

wrote a letter to the chief police officer seeking police protection for its staff and property fearing adverse reactions from electricity consumers in different localities in the garrison city.

In a letter to the CPO, the superintending engineer (SE) said that consumers were visiting different offices of Iesco in mobs and groups to protest against the increase in electricity bills. The employees of the distribution company feel insecure while performing their duties, he said in the letter. The SE termed the situation alarming which may lead to a law and order situation and protesters may damage property and installations.

A cobbler identifying himself as Hameedullah said his daily earning was Rs600 but he was charged with a bill of Rs16,424. “We have three lights, four bulbs, and one fridge in the house,” he said. Pointing to his inventory, he added: “This is [worth] Rs6,000. I don’t have any more money.”

Fearing the protests, the Peshawar Electric Supply Company (Pesco) has directed its staff to refrain from putting non-essential and “green number plate” vehicles on the roads till the “normalisation of the law and order situation”.

An exasperated rickshaw driver lashed out at the government saying: “First my bill used to be Rs2000-Rs2500 and now it is Rs10,300. Where should we go to clear this?

“I don’t even earn this much. How should I pay for this? My daily wage is Rs1,000-1,200 out of which we pay Rs500 for petrol. Running a stove at home costs between Rs500-Rs600. Where should we go? This inflation has destroyed us. We just have one energy saver at home that runs throughout the day and night.”

People display their inflated electricity bills in Lahore. — DawnNewsTV

Separately, activist Ammar Ali Jan announced on X that a campaign against electricity bills in Lahore would be held tomorrow.

“We need coordinated action across the country to demand relief for salaried class and ending privileges worth $ 17.4 billion annually for the elites. If people fight back, they will win,” he said.

Meanwhile, DawnNewsTV reported announcements urging consumers not to pay electricity bills were made from mosques in different areas of Wazirabad.

A shopkeeper in Karimabad Market explained that the main problem was that there wasn’t much business these days. He added that there were new bills every day. “Should we pay the bills or buy groceries for home? Our children are also very worried.”

He said he was left with no choice but to protest.

Dawn.com staffers also raised similar concerns. One staffer said his bill amounted to Rs12,000 this month. He urged the government to think differently and find a way to despite the current IMF agreement as consumers can’t pay extra taxes on bills amidst exorbitant prices of necessities.

On Thursday, reports of traders allegedly attacking K-Electric employees at a market in Karachi emerged. KE CEO Moonis Alvi later confirmed the same on X (formerly Twitter) and demanded that a first information report be registered against the attackers.

In an audio message broadcast on television, KE spokesperson Awais Rasheed Munshi could be heard saying: “We understand that many conversations and arguments are taking place between people throughout the country regarding the rising electricity prices.

“People might be getting angry while being worried. Pakistan’s electricity system works in a regulated environment. This falls under Nepra and power ministry. K-Electric’s work is related to performance, profit, and loss.

“When the prices of electricity rise, the company doesn’t make any profit. K-Electric and no other distribution company have any part to play in the rising prices and taxes,” he said.

Karachi, Gujranwala, Peshawar, Toba Tek Singh and other areas against exorbitant power bills. They blocked roads, set fire to power bills and announced they would challenge the “injustice” by the public utility in the court of law.

Speaking to DawnNewsTV today, one person deemed the taxes imposed by the government as “sheer cruelty”, adding that he would be old by the time he paid off his entire electricity bill.

“The bills are so high that we are unable to pay the school fees of children,” he said. “If a person is living in a rented house, he has to decide either to pay the rent or the electricity bills.”

Meanwhile, former parliamentarian Nafisa Shah called the electricity bills “backbreaking” and “unacceptable”.

“Why should the people of Pakistan suffer for the poor policies of rulers? Even now the lesson has not been learnt as Pakistan is going for expensive nuclear energy when cheaper options, solar, hydel, wind and local coal, are available,” she said on X.

rising electricity costs appeared to have put the power companies in a vicious cycle of declining consumption and shifting resultant additional capacity charges to consumers, compelling the government to seek the staggered imposition of Rs146 billion quarterly charges in six months, instead of three months to minimise the ‘price shock’.

The situation emerged at a public hearing organised by the National Electric Power Regulatory Authority (Nepra) on the government request for Rs5.40 per unit additional quarterly tariff adjustment (QTA) to consumers for April-June 2023 when the Power Division made a departure from its petitions. It requested that consumers be charged at a rate of Rs3.55 per unit for six months, instead of Rs5.40 per unit for three months, to reduce the price shock on consumers still struggling to absorb 26pc increase in base national rates notified last month.

Also, the Power Division proposed that even the Rs3.55 per unit additional charge should be imposed after September when an existing quarterly adjustment of Rs1.24 per unit would lapse, thereby further reducing the cost increase. The net increase in tariff for six months — October 2023 to March 2024 — would thus stand at Rs2.31 per unit, a Power Division official pleaded before the regulator.

Additional reporting by Umar Bacha, Hasaan Ali Khan and Muzhira Amin

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News

Trump business empire under threat as New York fraud trial opens

Published

28 mins ago

October 2, 2023

callumbryne

Former US president Donald Trump will appear in a New York court on Monday as a civil fraud trial against him and two of his sons kicks off, with the case threatening the Republican’s business empire as he campaigns to retake the White House.

In Monday’s case, Judge Arthur Engoron has already ruled that Trump and his sons Eric and Don Jr committed fraud by inflating the value of the real estate and financial assets of the Trump Organization for years.

New York Attorney General Letitia James is now seeking $250 million in penalties and the removal of Trump and his sons from management of the family empire.

Trump said late Sunday he planned to be present for the start of the trial on Monday morning.

“I’m going to Court tomorrow morning to fight for my name and reputation,” the 77-year-old wrote on his Truth Social platform. “This whole case is a sham!!!”

In addition to this civil case, Trump also faces several major criminal proceedings in the months ahead.

He is scheduled to appear before a federal judge in Washington on March 4 on charges of trying to overthrow the results of the 2020 presidential election won by Joe Biden.

Trump will then be back in New York state court, this time on criminal hush money charges, and later in a Florida federal court, where he is accused of mishandling classified documents after leaving office.

Finally, he will also have to answer to state charges in Georgia, where prosecutors say Trump illegally tried to get the southern state’s 2020 election results changed in his favor.

In the New York civil case, Engoron ruled that Trump, his two eldest sons, and other Trump Organisation executives lied to tax collectors, lenders, and insurers for years in a scheme that exaggerated the value of their properties by $812 million to $2.2 billion between 2014 and 2021.

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As a result, the judge revoked the business licenses that allowed the Trump Organisation to operate some of its New York properties.

Actually enforcing such penalties would be “a major blow to Donald Trump’s ability to do business in the State of New York going forward,” Will Thomas, a professor of business law at the University of Michigan, told AFP.

Under that kind of pressure, Trump — who made his reputation and fortune as a real estate mogul in the 1980s and had promised to bring his cut-throat industry tactics to the Oval Office — could eventually lose control over many of his company’s flagship properties, such as his 5th Avenue Trump Tower in Manhattan.

According to Attorney General James, a Democrat, Trump’s own apartment in that building is among the spaces that were fraudulently overvalued — it was listed as three times bigger than its true size.

Another Manhattan building, at 40 Wall Street, was overvalued between $200-$300 million in financial disclosures, James alleges.

Trump’s luxury Mar-a-Lago resort in Florida — the site of the classified documents drama — and several other Trump Organisation golf clubs also appear in James’s complaint.

Trump has repeatedly dismissed the New York civil allegations, calling James, who is Black, “racist,” and labeling Engoron “deranged.”

On his Truth Social platform, Trump claimed there was no “wrongdoing” in his actions of “fully paying back sophisticated Wall Street Banks in full, with interest, with no defaults, and with no victims.”

There are likely to be dozens of witnesses called to testify at the trial, including Trump himself, and former financial director of the Trump Organisation Allen Weisselberg, who served time in prison after pleading guilty to tax fraud in a separate case brought against the business.

Trump’s children Eric, Don Jr, and his oldest daughter Ivanka — who was initially also targeted by James’s complaint but ultimately not prosecuted — are also likely to present their own testimony.

Trump’s former lawyer Michael Cohen — now an outspoken critic of the former president — and officials from certain Trump-linked financial institutions are also expected to appear.

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News

At least 38 injured in police station fire in Egypt’s Ismailia

Published

39 mins ago

October 2, 2023

callumbryne

A huge fire broke out at a police headquarters in the Egyptian city of Ismailia on Monday, injuring at least 38 people, according to local media.

No fatalities were immediately reported but the building is staffed by soldiers at all hours and hospitals were placed on alert.

Footage on local media showed smoke rising from the entirely blackened multi-storey building.

The cause of the blaze, which broke out at the headquarters of the Ismailia Security Directorate before dawn, is not yet known.

Of 26 wounded who were transferred to a local hospital, 24 had suffered from “asphyxiation” and two from burns, local media reported citing the health ministry.

Twelve more were treated at the scene.

The health ministry deployed 50 ambulances to the scene, which were joined by military emergency services including two planes, according to state media.

Deadly fires are a common hazard in Egypt, where fire codes are rarely enforced and emergency services are often slow to arrive.

In August 2022, a fire caused by a short circuit killed 41 worshippers in a Cairo church, prompting calls to improve the country’s infrastructure and the response time of the fire brigade.

In March 2021, at least 20 people died in a fire at a textile factory in the capital, while in 2020, two hospital fires killed 14 people.

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News

Annual inflation rises to 31.4pc amid high energy prices

Published

1 hour ago

October 2, 2023

callumbryne

Pakistan’s annual inflation rate rose to 31.4 per cent in September from 27.4pc in August, statistics bureau data showed on Monday, as the country reels from high fuel and energy prices.

The country is embarking on a tricky path to economic recovery under a caretaker government after a $3 billion loan programme approved by the International Monetary Fund (IMF) in July averted a sovereign debt default, but with conditions that complicated efforts to rein in inflation.

On a month-on-month basis, inflation climbed 2pc in September, compared to an increase of 1.7pc in August. Reforms required by the IMF bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fuelled annual inflation, which rose to a record 38pc in May.

Food inflation remained elevated at 33.1pc with the year-on-year increase in non-perishable food items at 38.4pc and 4.37pc for perishable food items.

Annual consumer inflation in urban and rural areas increased to 29.7pc and 33.9pc year-on-year, respectively.

Meanwhile, the highest year-on-year increase was recorded in the categories of alcoholic beverages and tobacco (87.45pc), recreation and culture (58.77pc), furnishing and household equipment maintenance (39.32pc) and non-perishable food items.

Index-wise increase in inflation YoY (in descending order)

Alcoholic beverages and tobacco: 87.45pc
Recreation and culture: 58.77pc
Furnishing and household equipment maintenance: 39.32pc
Non-perishable food items: 38.41pc
Miscellaneous goods and services: 36.42pc
Restaurants and hotels: 34.3pc
Transport: 31.26pc
Housing and utilities: 29.7pc
Health: 25.28pc
Clothing and footwear: 20.55pc
Education: 11.12pc
Communication: 7.42pc
Perishable food items: 4.37pc

Interest rates have also risen to their highest at 22pc, and the rupee hit all-time lows in August before recovering in September to become the best performing currency following a clampdown by authorities on unregulated FX trade.

On Friday, the ministry of finance said in its monthly report that it anticipated inflation remaining high in the coming month, hovering around 29-31pc due to an upward adjustment in energy tariffs and a major increase in fuel prices.

The report added that inflation was, however, expected to ease, especially from the second half of the current fiscal year that starts on Jan 1.

On Saturday, the government cut petrol and diesel prices from a record high, after two consecutive hikes. The finance ministry cited international prices of petroleum products and the improvement in the exchange rate, following the clampdown on unregulated FX trade.

Inflation has been elevated, hovering in double digits, since November 2021.
The country targeted inflation at 21pc for the current fiscal year, but it averaged 29pc during the first quarter.

Worsening economic conditions, along with rising political tensions in the run-up to a national election scheduled for November, triggered sporadic protests in September, with many Pakistanis saying they are struggling to make ends meet.

Analysts said the inflation reading was in line with market expectations.

Tahir Abbas, head of research at Arif Habib Limited, a Karachi-based investment company, said inflation appeared to have peaked for the current fiscal year and would subsequently recede.

“The higher reading is mainly due to the low base effect which was also mentioned in the last monetary policy statement. Going forward, in the next few months, we expect inflation to ease to around 26-27pc,” said Fahad Rauf, head of research at Ismail Iqbal Securities, a Karachi-based brokerage firm.

Rauf said higher inflation statistics should not impact monetary policy.

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