The government has decided to extend Rs 744 million subsidy to Karachi Electric Supply Corporation (KSEC) to offset the impact of 38 paisa (15+23) increase in tariff, allowed by National Electric Power Regulatory Authority (Nepra) a few months ago.
Sources told Business Recorder that the Ministry of Water and Power had dispatched the revised tariff notification for printing in the official Gazette on Tuesday.
They said that Nepra had also allowed KESC 28 paisa increase in tariff for the current fiscal year, but it is unclear if it would be passed on to the consumers, or the government would give subsidy. They said that the Ministry of Water and Power would submit the case to the ECC in its upcoming meeting for guidance.
Sources said that the Privatisation Commission (PC) has suggested that a inter-ministerial committee should be constituted, on permanent basis, to monitor the use of subsidy extended by the government to KESC.
According to sources, the utility is of the view that a realistic tariff formula should be in place to put it on a more viable footing, and enabling it to finance the capital expenditure required for availability and reliability of power supply, reducing energy losses, improving customer services and running it efficiently.
The power utility further says that its future power generation would be based on LPG, an alternative to natural gas, which would be almost 50 percent costlier.