Power tariff to be increased by Rs1.50 per unit from July 1

ISLAMABAD: The government is all set to increase electricity tariff by Rs1.5 per unit with an financial impact of Rs175-180 billion as under commitment with IMF the full cost of power generation has to be recovered from the consumers, one of the top men in Energy Ministry confirmed to The News.

Though the Nepra is yet to come with determination on the petition of DISCOs seeking Rs2 per unit increase to pass on the burden of Rs201 billion, but the government has decided to increase Rs1.5 per unit with financial impact of Rs175-180 billion as IMF wants the government to recover the full cost of the electricity generation. ‘We are also permitting that regulator will also give its verdict with increase in tariff less than Rs2 per unit.’

However, the official said, the government has successfully persuaded IMF that it will not pass the net hydel profit of Rs146 billion in the tariff implement from January 2019 arguing that it wants to pass burden of Rs146 billion NHP, which was decided in CCI in 2016 but PML-N government did not include in the tariff, to consumers in staggered manager in next three years and to this effect the government has approached the Nepra authorities and filed the review motion on regulators’ earlier determination. The top official claimed the tariff that is to be increased from July 1 that will later be reduced by Rs1.25 per unit in next one year through bringing down the losses with the introduction of element of efficiency provided the exchange rate did not go upward.

He said that the subsidy of Rs 217 billion for electricity consumers will be kept in the forthcoming budget 2019-2020 for the consumers using less than 300 units which are 70 percent of the domestic sector. Out of Rs 217 billion, Rs15-16 billion will be kept for the life line consumers of K. Electric and also for those who consume below 300 units a month. The cost of electricity generation stands at Rs15.53 per unit whereas the average tariff hovers at Rs13.75 per unit. The IMF wants the government to recover the electricity generation cost of Rs15.53 per unit from the consumers.