Consumers using 300 to 700 units: government may charge full power generation cost of Rs 14.50/unit

The government may charge full power generation cost of Rs 14.50 per unit from the consumers using 300-700 units monthly in a bid to overcome the deepening problem of circular debts, it was reliably learnt.
Sources told Business Recorder that energy committee on power sector constituted by the prime minister has recommended that power tariff for consumers using 300-700 units should be increased by 40 percent to recover the full generation cost by charging them Rs 14.50 per unit instead of Rs 10.55.
However, the final decision to this effect would be taken by the prime minister after presentation by the committee. The finance ministry has reportedly expressed its inability to arrange funds for the huge piled up Rs 270 billion circular debts due to budgetary constraints. The meeting was informed that circular debts reached Rs 270 billion, in addition to Rs 27 billion payment to Karachi electric Supply Company (KESC).
The committee on Energy headed by Finance Minister Dr Abdul Hafeez Shaikh, on Wednesday discussed different options to resolve circular debts problem and was informed that consumers using 50 units were being charged Rs 2.50 per unit and up to 300 units Rs 6.40 and those consuming 300 to 700 are being charged Rs 10.55 per unit. There was consensus that consumers using above 300 units should not be entitled to subsidy and they must pay full cost of electricity.
The meeting was informed that total industrial and commercial consumers are 28 and five percent, respectively, whereas 16 percent consumers in agriculture sector seems considerably higher compared to the total number of tube wells getting subsidised electricity. The domestic consumers are 43 percent and bulk consumers are three percent.
The committee is scheduled to suggest different options to the prime minister for resolving inter-circular debts amid the growing pressure from the IPPs to clear their dues. As many as nine IPPs have invoked sovereign guarantees due to financial crunch in the wake of non-payment of billed amount by the state-owned Central Purchasing Power Company. An official said that the meeting also discussed the option to take strict action against power defaulters of private and public sector without discrimination, but it would require strong political will and co-operation of the provinces.