Power tariff may go up by over Rs 4 per unit

The government is likely to increase power tariff by over Rs 4 per unit across-the-board after National Electric Power Regulatory Authority (Nepra) allowed hike in tariff to Islamabad Electric Supply Company (Iesco). "If the caretaker government does not raise tariff, it would have to give Rs 400 billion subsidy to power consumers," sources said, adding that PPP government had also given subsidy of Rs 254 billion against the allocated amount of Rs 180 billion.
The power regulator was holding decision of power tariff following the directions of PPP-led government to please voters in next elections. Since June 2012, petitions of power distribution companies (Discos) were pending before Nepra but it failed to decide raise in power tariff due to political compulsion of PPP-led government. Sources said current average power generation cost stands at Rs 11.99 per unit, whereas consumers pay only Rs 8.89 per unit. The government pays the Rs 3.10 per unit tariff differential in subsidies.
An official of power ministry said that Iesco was the most efficient power distribution company and its tariff was the benchmark across the country. According to current policy, Iesco tariff is implemented for the consumers of all Discos. "If the government takes this tariff as benchmark, consumers across the country will be facing hike by Rs 4.80 per unit," official said, adding that hike in tariff has been given for the ongoing financial year due to raise in power generation cost and other operational expenses.
Based on the targeted sales of 7,690 GWh for the FY 2012-13, the petitioner''s average sale rate works out to Rs 13.64/kWh, consisting of Rs 11.45/kWh of adjusted PPP, Rs 0.95 /kWh of DM. Rs 0.14/ kWh of quarterly PPP adjustments and Rs 1.10 of prior year adjustment.
According to the decision of Nepra, the domestic consumers consuming 50 units per month will face hike in tariff by Rs 1 per unit, Rs 2.30 per unit raise for 1-100 units per month, Rs 4.80 per unit for 101-300 units, Rs 3 per unit for 301 to 700 units and Rs 1.50 per unit for domestic consumers using over 700 units per month. Iesco commercial consumers will face hike of Rs 1.50 per unit and agricultural and industrial consumers Rs 3.30 per unit. Nepra has increased reference price of furnace oil from Rs 65,000 to Rs 75,000 per ton which also became one of the main reasons in increase in power tariff.