Supreme Court dismisses K-Electric’s appeal of its subsidy withdrawal

ISLAMABAD: The Supreme Court rejected K-Electric’s appeal on Thursday, stating that it was the federal government’s responsibility to provide or remove subsidies.

K-Electric’s appeal was dismissed by a three-judge bench, led by Chief Justice Umer Ata Bandial and consisting of Justices Syed Mansoor Ali Shah and Ayesha A Malik.

On January 22, 2020, K-Electric challenged the Sindh High Court’s(SHC) ruling to quash the corrigendum regarding tariff policy. According to the SHC, the corrigendum of 28 September 2020 is void, issued in excess of authority and illegal therefore, it is quashed. K-Electric had been ordered by the court to charge their industrial consumers the tariff.

K-Electric’s appeal was dismissed by the court on Thursday with the statement that it was the federal government’s duty to grant or withdraw subsidies. Justice Syed Mansoor Ali Shah noted that the Ministry of Energy interfered with NEPRA’s affairs, so, next time, the ministry should not ignore NEPRA.

The secretary of the Ministry of Energy and Power Division appeared before the court in compliance with the court’s last order, arguing that K-Electric received subsidies in tariffs, which were later withdrawn according to law.

Observing that NEPRA should be able to do its work, Chief Justice Umer Ata Bandial said that the ministry must take care of this issue next time. The chief justice asked K-Electric why the company opposed the withdrawal of the subsidy when it did not object to the subsidy it received.

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The chief justice pointed out that NEPA was not taken into confidence when it was offered a subsidy, despite that industrial units and K-Electric did not mind it. Energy and Power Department spokespeople told the court that Prime Minister executive order has resulted in a 5 rs reduction in power tariffs, which is unrelated to NEPRA tariffs.

On the other hand, Justice Mansoor Ali Shah suggested that subsidies on main commodities would provide relief to the public. The judge added, the court needs to know what law the subsidy is based on.

According to the Energy and Power Division of the Department, the federal cabinet offers subsidies while exercising its powers. However, Justice Mansoor Ali Shah said that the Federal Cabinet does so in accordance with law.

Towards the court, the Secretary of Energy and Power Division explained that subsidies were given through utilities stores, adding that industrial consumers should be charged the tariff. The consumer, he said, would be burdened more if the ministry took the subsidy.

In response to a court’s question, the secretary of Power Division said that subsidies were provided based on budget and following parliament’s approval, adding that subsidies were sometimes provided through supplementary grants.

K-electric was also allocated Rs330 million share by the government, the official continued, and power consumers were grouped into seven to eight categories, while tariffs were set depending on the category of consumer.

K-Electric’s tariff was lower than the national tariff, according to the secretary of Power Division. As a result, the court dismissed the appeals after hearing the explanation of the secretary for the Energy and Power Division.

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