Power tariff increased by six paisa per unit

The Federal government has increased power tariff for Pepco's Distribution Companies (Discos) by six paisa per unit for domestic, commercial and industrial consumers effective February 25 on the insistence of World Bank (WB), well-informed sources told Business Recorder on Wednesday. However, agriculture consumers and those, who use up to 50 units per month, have been exempted from this raise.
Besides the consumers of Islamabad Electric Supply Company (Iesco), Peshawar Electric Supply Company(Pesco), Gujranwala Electric Supply Company (Gepco), Lahore Electric Supply Company (Lesco), Faisalabad Electric Supply Company(Fesco), Multan Electric Supply Company (Mepco), Hyderabad Electric Supply Company(Hesco), Quetta Electric Supply Company(Quesco), and Karachi Electric Supply Company (KESC) will face the brunt of this increase as these utility companies procure power from Pepco to meet their shortfall.
The Ministry of Water and Power had issued notification in the official gazette of Pakistan, which was also faxed to the Finance Ministry's team in Dubai during negotiations with the International Monetary Fund (IMF), the sources added.
Prime Minister's Advisor on Finance Shaukat Tarin had announced that power tariff would be raised before April, but on the World Bank's insistence, the government had brought forward this increase, revealed one of insider in Finance Ministry on condition of anonymity.
According to the letter of intent (LoI) agreed between Pakistan and IMF, that "the average base tariff will be further increased during 2008-09 according to a schedule to be agreed with the World Bank by end-December 2008 (structural benchmark)."
The sources said current raise in power tariff would be over and above the increase, to be notified in April before the government goes to the IMF for economic review, which was mandatory after every month and a half.
On January 30, the National Electric Power Regulatory Authority (Nepra) had allowed the Discos to readjust their consumer-end tariff upward in the light of the revised Power Purchase Price (PPP).
The tariff had been revised in the light of a policy decision taken by the Federal government in June 2008, according to which power tariff has to be reviewed on monthly basis. The tariff for the consumers of Iesco had been increased by nine paisa per unit; 108 paisa per unit for Hesco; 28 paisa per unit for Pesco; 64 paisa per unit for Mepco; 14 paisa per unit for Gepco; 77 paisa per unit for Lesco; and 81 paisa per unit for Fesco. However, the consumer tariff for Quetta Electric Supply Company (Quesco) has been reduced by 101 paisa per unit.
According to sources, the quantum index of large scale manufacturing (QIM) has already registered a negative growth of 4.7 per cent in the first six months of the current fiscal year (July-December) 2008 as against positive growth of 5.08 per cent in the same period of last year.
The main reasons of this decline in QIM growth were due to power and gas shortage, which is one of the basic inputs of the industry. "This reflects implications of acute shortage power shortage and rising cost of doing business," the sources quoted Finance Ministry as briefing the ECC in its meeting on March 3.