Fuel surcharge on small domestic consumers declared illegal

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LAHORE: Terming the National Electric Power Regularity Authority (Nepra) an inefficient body, the Lahore High Court on Monday declared unlawful the recovery of fuel adjustment surcharge from domestic consumers using electricity up to 350 units only.

Justice Muhammad Khalid Mahmood Khan strictly directed Nepra and Water & Power Development Authority (Wapda) to refund the money if collected from the consumers of the said category.

However, the court allowed Nepra, Wapda and others to recover fuel adjustment surcharge from the industries and domestic consumers using more than 350 units of electricity. The judge also directed Nepra to reconsider various issues raised in the petitions and pass a speaking order with reasoning. The court observed, in its judgment, that Nepra was an inefficient body of the country that had failed to determine hardships of the poor whose earning was not more than Rs15,000. It further observed that the judiciary was bound to protect rights of the people given to them in the constitution.

Gulshan Spinning Mills, Rupali Polyester, various domestic consumers and others had challenged the recovery of fuel adjustment charges in 2011.The petitioners submitted that electricity was one of the biggest single components which alone constituted 50 percent of their total cost of end product. They submitted that minor fluctuation in the electricity price affected the cost of production. They further contended that they had paid electricity bills for the month of April, May, June of that year but the respondents, acting retrospectively, added 20 percent amount as the fuel adjustment charges for months of April and May to the bill of October. They submitted that the respondent electric companies had taken action on basis of two notifications issued by the federal government on August 23, 2011 under added provision S 31(4) of the Regulation, Generation, Transmission, Distribution of Electric Power Act of 1997. They submitted that the provision was added as it was not provided in the original Act, contending that as per the law, no notification, having adverse financial impact, could be issued retrospectively.

The petitioners submitted that the bills for the months of April and May of that year had been paid, therefore, it was a closed and past transaction and respondents were not authorised to receive fuel adjustment charges for the said months. They prayed to the court to set aside fuel adjustment charges and the notification issued in this regard besides restraining respondents from any adverse action against them.

However, the respondents argued that the notification issued for the recovery of charges was legal and pleaded the court to dismiss the petitions.The court, after hearing, had reserved the verdict which was announced in open court on Monday. It had already stayed the recovery of fuel adjustment charges from domestic consumers who use electricity up to 350 units.

Courtesy: The News

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