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ISLAMABAD: Consumers of ex-Wapda distribution companies (Discos) faced a cumulative increase of about Rs1.60 per unit (14 per cent) in their electricity tariff owing to two separate but simultaneous decisions by the government and the power regulator on Wednesday.
After deliberating in at least eight meetings, the government approved Rs1.20 per unit (10.3pc) average increase in base tariff at a meeting of the Economic Coordination Committee (ECC) of the cabinet with a cumulative impact of about Rs124 billion. With the addition of 17pc general sales tax, the total financial burden on consumers will be Rs145bn at the rate of Rs1.40 per unit increase.
The average applicable tariff for all Discos would thus increase to Rs12.92 from Rs11.71per unit. The increase in electricity rates is also a must to qualify for an economic bailout package from the International Monetary Fund which had last month urged the authorities to take the tough decision.
Separately, the National Electric Power Regulatory Authority (Nepra) allowed a 20 paisa per unit increase in the monthly tariff of Discos on account of fuel price adjustment for electricity consumed in September. The total increase in tariff will, therefore, be Rs1.60 per unit when consumers get bills next month.
Tariff for agricultural tube wells reduced from Rs10.35 to Rs5.35 per unit
The announcement for tariff increase approved at the ECC meeting presided over by Finance Minister Asad Umar was withheld at the last moment in view of Prime Minister Imran Khan’s address to the nation.
An official said the ECC decision would be placed before the federal cabinet meeting on Thursday for endorsement and formal announcement. The official said the ECC did not allow an increase in tariff for those consuming up to 300 units per month and also protected the export-oriented industrial sector with a fixed rate of 7.5 cents per unit — Rs9.75per unit at the current exchange rate.
A late-night brief statement issued by the power division said the tariff for agricultural tube wells had been reduced from Rs10.35 to Rs5.35 per unit.
It said a 78 paisa per unit increase had been approved for general industrial consumers.
On the other hand, the ECC allowed 10pc increase in tariff for consumers with monthly consumption of 301 to 700 units and 15pc for consumption above 700 units, the official said.
Likewise, the tariff for commercial consumers was increased by 20pc and that for bulk consumers — residential colonies, high-rise buildings, hostels and temporary connections — by 25pc.
Officials said Nepra had determined a total increase of Rs3.82 in average tariff with a total financial impact of about Rs400bn. The regulator observed that after accounting for the existing subsidy allocated in the budget, about Rs2.18 per unit average increase was necessary with an impact of Rs227bn.
The officials said the budgeted tariff differential subsidy stood at Rs179bn. The tariff increase allowed by the ECC would help Disco generate about Rs125bn.
The ECC is reported to have delayed for the time being about Re1per unit increase payable to Punjab and Khyber Pakhtunkhwa as additional net hydel profit. The impact of this delay was estimated at Rs95-100bn for which the two provinces would be taken on board to work out a staggered adjustment in future.
Nepra took the decision of allowing monthly fuel price adjustment at a public hearing at the request of the Central Power Purchasing Agency (CPPA) on behalf of Discos seeking a 44 paisa per unit increase in tariff.
The CPPA had reported that Discos charged consumers a reference tariff of Rs5.12 per unit in September while the actual fuel cost turned out to be Rs5.57, hence it should be allowed to recover 44 paisa per unit additional cost from consumers next month.
Nepra did not agree to various components of the reported additional costs and calculated actual fuel price cost at Rs5.32 per unit and approved an increase of 20 paisa per unit. This will yield about Rs2.5bn additional revenue to Discos.
The higher electricity rates approved by the ECC and the regulator would be recovered from consumers in the billing month of November.
Pulished in Dawn, October 25th , 2018
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