Government Steps Back OGRA, NEPRA to Independently Set Tariffs

The Federal Cabinet has given its approval to amend the NEPRA and OGRA Acts, a move that is expected to confer more authority in tariff notifications to both regulatory bodies.

In a significant development aimed at enhancing regulatory autonomy, the caretaker government has decided to expedite efforts to empower the Oil and Gas Regulatory Authority (OGRA) and the National Electric Power Regulatory Authority (NEPRA) in matters concerning the determination of electricity and gas tariffs, according to sources familiar with the matter speaking to media.

The Federal Cabinet has given its approval to amend the NEPRA and OGRA Acts, a move that is expected to confer more authority in tariff notifications to both regulatory bodies.

Sources privy to the decision revealed that the approved amendments will grant NEPRA and OGRA greater autonomy in setting electricity and gas tariffs, thereby aiming to streamline the regulatory process and reduce government intervention in rate determination.

The Power and Petroleum Division, in collaboration with NEPRA and OGRA, has been entrusted with the task of drafting the necessary rule changes to accommodate the amended provisions.

The amendments are designed to enable NEPRA and OGRA to issue tariff notifications independently, marking a shift towards a more market-driven approach in tariff determination.

Additionally, the revised Acts will incorporate provisions for the establishment of appellate tribunals, intended to address public grievances and provide a channel for recourse in case of disputes arising from tariff decisions.

This move by the caretaker government reflects a commitment to bolstering regulatory independence and fostering a more transparent and efficient system for determining electricity and gas tariffs in Pakistan.

It is anticipated that the enhanced autonomy of NEPRA and OGRA will contribute to greater regulatory stability, encourage investment in the energy sector, and ultimately benefit consumers by ensuring fair and competitive tariff rates.

The decision comes at a time when Pakistan’s energy sector is facing challenges related to pricing mechanisms, regulatory oversight, and the need for investment to meet growing demand and improve infrastructure.

By empowering NEPRA and OGRA to exercise greater autonomy in tariff determination, the caretaker government aims to address these challenges and create an environment conducive to sustainable growth and development in the energy sector.

However, while the move has been welcomed as a positive step towards enhancing regulatory efficiency, some stakeholders have raised concerns about the need to ensure accountability and transparency in the decision-making process of NEPRA and OGRA.

Critics argue that while granting regulatory autonomy is essential, it must be accompanied by robust mechanisms for oversight and accountability to prevent potential abuses of power or conflicts of interest.

Nevertheless, the decision to empower NEPRA and OGRA represents a significant milestone in Pakistan’s ongoing efforts to reform its energy sector and create a more conducive environment for investment and development.

As the caretaker government moves forward with implementing the amended provisions, stakeholders will be closely watching to assess the impact on the energy market and the extent to which it delivers on its objectives of promoting efficiency, competitiveness, and consumer welfare.