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October 25, 2018

Federal Cabinet approves Rs 1.27 per unit increase in power tariff


Thu, Oct 25, 2018

ISLAMABAD: Federal Cabinet on Thursday approved increase in electricity tariff by Rs 1.27 per unit as approved by Economic Coordination Committee (ECC) of the cabinet rather than Rs 3.82 per unit as proposed by National Electric Power Regulatory Authority (NEPRA).

This was announced by Federal Minister for Finance Asad Umar while briefing the media about the cabinet decisions, flanked by Federal Minister for Information and Broadcasting Chaudhry Fawad Hussain and Federal Minister for Power Umar Ayub Khan.

The minister said NEPRA being a regulatory authority was mandated to determine the power tariff and distribution and it had recommended Rs 3.82 per unit increase in the electricity prices.

However, the minister said that there was no increase in power tariff for lifeline users using electricity less then 300 units per month, agriculture sector and export oriented industries.

The step was taken to fulfill the government’s resolve to provide maximum relief to low income people, protecting the farming community as well as promoting the local exports for economic development and social prosperity in the country.

The minister said there were about 17 million household electricity consumers, comprising about 100 million people, and that despite the increasing trend in petroleum products in the international markets the petrol and diesel prices had been reduced by the present government.

The Finance Minister said that it was decided to enhance power tariff by 10 percent for the consumers using 300 to 700 units per month. They comprise 20 percent of the total power consumers.

Whereas, the tariff was enhanced by 15% for the domestic consumers using over 700 units per month, he added.

Meanwhile, he said there was no increase for the small and medium scale enterprises using 5 KV load. The power tariff for agriculture sector has been reduced from Rs 10.35 per unit to Rs 5.35 per unit for the entire financial year, he added.

The minister said that power sector losses in the country had swelled to Rs 453 billion during the last year which could reach Rs 550 billion during the current year, if the appropriate steps were not taken to check the line losses and theft.

This loss, he said, was putting additional burden on ordinary consumers in the form of enhanced rates of electricity and the government was forced to take foreign loans to fulfill the fiscal and financial gaps to run the economy.

Asad Umar said no increase would be made in electricity tariff for schools, hospitals and other institutions, adding that government was determined to save an amount of Rs 40 billion by improving the electricity distribution system during the current year.

To a question, Finance Minister said Pakistan and Saudi Arabia were brotherly countries with deep bonds of religion, history and cultural relations.

He said Pakistan would act as a bridge to develop unity, friendship and harmony among all the Muslim countries for the development of Ummah.

The minister clarified that Pakistan would never become part of any conspiracy and would continue its role to promote peace and harmony among all the Muslim states.

The minister further clarified that financial package agreed with Saudi Arabia was not part of any deal, adding that Saudi Arabia had not attached any conditions with the financial assistance.

To another question, he said government was still exploring various avenues for meeting its financing needs prior to approaching the IMF, adding that arrangements with IMF would help to attract the investment from the other multilateral donors.

Federal Minister for Power Omer Ayub Khan said government was following the guidelines of Prime Minister Imran Khan to facilitate and give maximum relief to poor people of the country.

He said National Electric Power Regulatory Authority (NEPRA) had recommended to increase power tariff by Rs 3.82 after detail calculation, but the government decided to protect the people by taking other measures.

He said power sector was facing Rs 50 to Rs 60 billion loss per year due to inefficiencies, adding, “We are overcoming inefficiencies in departments for better results”.

Federal Minister Chaudhry Fawad said that in line with its clear stance that corrupt elements would not be spared, the government was taking measures to facilitate National Accountability Bureau’s (NAB) officers, so they could perform their duties in a better manner.

He said that NAB officers would be given official passports so that they did not have difficulty in traveling and could catch the thieves easily.

He said Saudi Arabia had reduced the visa fees from 2,000 Saudi rials to 300 rials.

Chaudhary Fawad Hussain said the cabinet had decided that the first Pakistani would be sent to space in year 2022. An agreement had been signed to that effect between SUPARCO and their Chinese counterpart.