Amendments in Nepra, Ogra Acts to end govt’s role in notifying power, gas tariffs

Federal cabinet allows Power and Petroleum Divisions to preparer necessary amendments in Nepra and Ogra Acts

ISLAMABAD  -   The federal cabinet has approved the decision regarding amendments in National Electric Power Regulatory Authority (NEPRA) and Oil and Gas Regulatory Authority (OGRA) Acts which will end the government’s role in notifying of electricity and gas tariffs and will ensure its swift application to end consumers.

The federal cabinet has allowed Power and Petroleum Divisions to preparer necessary amendments in NEPRA and OGRA Acts, in the light of decisions of the Cabinet Committee on Energy to make these independent in notifying tariffs without involving government in future, official source told The Nation here.

Following the directives of Cabinet Committee on Energy (CCoE) for allowing the concerned Divisions to prepare necessary amendments in NEPRA and OGRA Acts, the caretaker cabinet has approved the summary in this regard through circulation, the source maintained.

Currently, National Electric Power Regulator Authority has the power of notifying the determinations on monthly fuel charges adjustments without the approval of the Federal government, however the tariff on account of quarterly adjustments or the application of base tariff application to various categories is notified by the federal government. Same is the case with Oil and Gas Regulatory Authority (OGRA) that wait for the federal government endorsement on the notification related to gas tariff and its application to various categories. After the amendments, both the regulators will be empowered to notify the tariffs of electricity and gas without involvement of the government.

The CCoE decision, which was forwarded to Federal Cabinet for approval, said that “necessary amendments in NEPRA and OGRA Acts may be made and submitted to CCoE so that regulators were made independent in notifying tariffs for various categories instead of involving government. It was also pointed out that respective appellate tribunals should be created where needed to hear complaints and government should withdraw itself from indulging in tariff determination. The government may issue policy statement accordingly,”. The CCoE decision was approved by the cabinet, said the source.

The cabinet also approved the creation of appellate tribunals, where required, to hear complaints, the source said and added that the amendments will be submitted to the CCoE for final approval. A summary presented to CCoE and then the caretaker cabinet said that the Power Division had been working on the market reforms with an aim of transitioning the electricity market model of Pakistan from Single Buyer Model to Competitive Trading Bilateral Contract Market (CTBCM). Power Division had prepared the latest monthly reports on the progress of CTBCM for the month of January, 2024. The first part of this progress report highlights the key updates en CTBCM including CCoE’s approval on the submission of Final Test Run Report to NEPRA and its ratification by the federal cabinet. The second pact focuses on the readiness of the power sector for the competitive wholesale electricity market in Pakistan. The last part of the progress report presents the status update on the completion of the actions planned under the CTBCM Test-Run phase. The caretaker cabinet also approved the submission of monthly report to CCoE on the progress towards implementation of Competitive Trading Bilateral Contracts Market (CTBCM). The cabinet approved the CCoE directives to Power Division/PPIB and NEPRA to complete all the relevant tasks for implementation of CTBCM by March and June 2024 respectively.

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