PM allows 6pc hike in power tariff
ISLAMABAD: The prime minister has approved a summary for a six per cent increase in electricity tariff for the Oct-Dec quarter, sources in the Ministry of Water and Power told Dawn on Wednesday.
The cumulative impact of the increase on consumers will be about Rs38 billion. The increase will not affect lifeline consumers using up to 50 units per month.
The IMF has been pressing the government to end its annual subsidy of about Rs132 billion on electricity.
The monthly billing to the consumers by the Pakistan Electric Power Company (Pepco) stands at Rs34 billion, but distribution companies have failed to make adequate recoveries.
The finance ministry, in its input to the summary, said the government had already cleared all circular debt of the power sector by issuing finance certificates worth Rs85 billion.
‘It is now the responsibility of power companies to reduce their losses and not to depend on subsidies from the government,’ said a senior official of the finance ministry.
While the IMF has allowed the government to continue to provide Rs55 billion
in subsidy for the current fiscal year, the remaining amount would have to be recovered by increasing power tariff.
Out of eight Pepco distribution companies, Iesco has the lowest transmission and distribution losses of 11 per cent, followed by Gujranwala Electric Power Company (11.25 per cent), Faisalabad Electric Supply Company (11.23 per cent), Lahore Electric Supply Company (12.30 per cent), Multan Electric Power Company (17.5 per cent), Quetta Electric Supply Company (20.50 per cent), Peshawar Electric Supply Company (33.20 per cent) and Hyderabad Electric Supply Company (34.5 per cent).
Transmission and distribution losses of the Karachi Electric Supply Company stand at 35 per cent.
As per commitments made by the government to donor agencies, power tariff will be increased in three phases — that of six per cent, 12 per cent and six per cent.