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Supreme Court Overturns LHC Ruling

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The Supreme Court of Pakistan has overturned a Lahore High Court (LHC) judgment that declared the practice of applying the fuel price adjustment (FPA) to monthly electricity bills as illegal. The three-member bench, led by Chief Justice Qazi Faez Isa, declared the LHC ruling “impractical both constitutionally and legally” while hearing an appeal from the power distribution companies (DISCOs) challenging the decision.

The bench emphasized that the Appellate Tribunal of the National Electric Power Regulatory Authority (Nepra) is the appropriate authority to handle this complex matter, not the LHC. The petitioners have been directed to file an appeal before the Nepra Appellate Tribunal within the next 10 days. Furthermore, the tribunal has been instructed to expedite the hearing and reach a decision within the statutory timeframe.

Advocate Salman Akram Raja, representing the DISCOs, argued that the formation of Nepra itself was unconstitutional when the FPA was initiated in May 2022. Chief Justice Isa challenged this stance, emphasizing that if there were constitutional concerns about Nepra’s formation, they should have been addressed separately. Justice Athar Minallah, another judge on the bench, clarified that neither the Supreme Court nor any other court had jurisdiction over the technical matters of Nepra. The LHC decision was perceived as overstepping its boundaries in this context.

The Attorney General confirmed that both Nepra and DISCOs were open to resolving the matter through the appropriate forum. The apex court also directed that the outstanding dues from companies and industries following the LHC’s initial decision would now be subjected to the Nepra Appellate Tribunal’s verdict.

Earlier this year, in February, the Lahore High Court had declared the FPA in electricity bills as illegal. It observed that the demand for FPA, quarter tariff adjustment, and a change of the status of the tariff from industrial to commercial by Nepra did not fully conform to Section 3 of the Nepra Act, 1997. Justice Ali Baqar Najafi of the LHC had disposed of over 3,000 petitions challenging the authority’s mandate. He directed Nepra not to charge any exorbitant tariff beyond the paying capacity of domestic consumers and to provide maximum subsidies to domestic consumers using up to 500 units per month.

This Supreme Court decision has far-reaching implications for the energy sector in Pakistan, ensuring that matters related to fuel price adjustments in electricity bills are reviewed through the proper channels, particularly the Nepra Appellate Tribunal. It underscores the significance of adhering to the legal framework in addressing such complex and economically impactful issues. The ruling will influence the way FPA is managed and could potentially have an impact on electricity costs and tariff adjustments for various categories of consumers.

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