The Ministry of Water and Power plans to increase power tariff by 2 percent in the first week of next month (December) as per agreement with the international financial institutions, well-informed sources told Business Recorder.
The government has already raised power tariff by 66 percent in the last 32 months due to poor management, huge losses in transmission and distribution companies and continuous increase in fuel prices ie furnace oil and gas.
According to the business plan submitted by the defunct Pakistan Electric Power Company (Pepco), two percent raise in electricity tariff will be notified every month until it totals 24-25 percent at the end of current fiscal year. The International Monetary Fund (IMF), in its latest aide memoire welcomed the authorities'' energy sector reform plan and its initial stages of implementation. However, the Fund has emphasised to the authorities that the reform plan and its budgetary impact requires an assessment by the World Bank and Asian Development Bank (ADB).
Recently, the federal government notified two percent increase in consumers end tariff across the board. The country''s business community is already protesting against the previous increases in electricity and gas tariff, which account for the local industry becoming uncompetitive in the region. Meanwhile, National Electric Power Regulatory Authority (Nepra) has reduced power tariff under monthly fuel adjustment mechanism by Rs 0.32 per unit.
On Thursday, owing to the decrease in power production in October, Nepra approved a reduction of Rs 0.32 per unit for eight electricity distribution companies of the country. This benefit will be passed on to the consumers in next month''s bills. Nepra Chairman Khalid Saeed demanded, in an open hearing, the details of the power purchase agreement between Karachi Electric Supply Corporation (KESC) and the Central Power Purchase Company (CPPA).
A spokesman of the Ministry of Water and Power revealed the following monthly fuel price adjustment: 33 paisa per unit reduced for the month of August, 36 paisa per unit for the month of September and 32 paisa has been reduced for the month of October 2010. The reduction in the per unit price during the last two months (August-September) under monthly adjustment has already been passed on to the consumers and the relief for the month of October will be given in the forthcoming electricity bills, he added.