KP seeks over Rs2.3tr in hydel dues from Centre
DLP Report
PESHAWAR
Khyber Pakhtunkhwa Chief Minister Mohammad Sohail Afridi has said the province’s hydel power, oil, gas and LPG resources are playing a major role in meeting Pakistan’s energy needs, but denial of the province’s due share despite its contribution is no longer acceptable.
He was presiding over a meeting of the Energy and Power Department in Peshawar, where he was briefed on ongoing development projects, energy generation, according to a statement.
The forum was informed of the provincial transmission and grid system, natural resources and outstanding payments owed by the federal government.
The meeting was informed that KP was supplying more than 70 per cent of the country’s total hydel power generation to the national grid. However, in the absence of a provincial transmission line after the 18th Amendment, the province was compelled to sell its generated electricity to the federal government.
The chief minister said that despite the province’s significant contribution to the country’s energy requirements, federal liabilities on account of net hydel profit (NHP) under the AGN Kazi formula had exceeded Rs2.3 trillion.
The meeting was told that the federal government also owed more than Rs78 billion to KP in regular NHP payments under the earlier interim arrangement.
It was further pointed out that Punjab had received a larger share of NHP payments than KP despite the latter producing more than 70pc of the country’s hydel power. During the last three years, KP received Rs87.7bn in NHP payments against Rs160.8bn paid to Punjab.
Mr Afridi said delays and disproportionate payments of NHP were adversely affecting the province’s financial position. The meeting was informed that KP had approached the Council of Common Interests (CCI) over the five per cent annual indexation of NHP, outstanding dues, late-payment surcharge and the mechanism for direct payments.
The meeting was also informed that the province was developing its own transmission and grid system to ensure reliable electricity transmission and meet industrial requirements. It was also strengthening its transmission, regulatory and distribution systems at the provincial level.
The chief minister directed officials to present the provincial transmission line project at an investors’ conference, saying the scheme was highly profitable and several countries were interested in investing in it.
According to the briefing, the Pakhtunkhwa Energy Development Organisation (Pedo) has an overall energy project portfolio of around 7,890 megawatts. Its operational projects, with a combined capacity of 224MW, generated Rs8.829bn in revenue during the financial year 2025-26.
The chief minister said failure to provide the people of KP their due benefit from the province’s natural resources and energy production amounted to a violation of their constitutional rights.
The meeting was informed that under Article 158 of the Constitution, KP had priority in the use of natural gas produced within the province. It was further said that KP contributed 48pc of the country’s total crude oil production.
The meeting recommended that the federal excise duty levied at the wellhead in KP be paid to the province under Article 161 of the Constitution. It also recommended taking up with the federal government the alleged violation of Petroleum Policy 2012 in the sale of gas from the Razgir field to a third party. The meeting was told that KP was producing 850 tonnes of LPG daily against provincial consumption of 600 tonnes. The province accounted for 38pc of the country’s total LPG production. It recommended allocation of 10pc of LPG production for KP under the LPG Policy 2016. The meeting was informed that allocation of 75 tonnes of LPG per day could meet the annual requirements of around 245,000 households.
It was further stated that allocating 10pc of LPG production to KP could help prevent the cutting of around 2,440 hectares of forests annually.
Mr Afridi directed the authorities to raise all relevant matters concerning the province’s constitutional and financial rights with the federal government in a strong and formal manner and pursue every available constitutional and legal avenue for their resolution.
He said that if the required relief was not provided by the federal government, the provincial government should take the matters to the courts to secure KP’s rights.
