Due to upward revision in furnace oil prices, the National Electric Power Regulatory Authority (Nepra) on Wednesday approved Rs 1.07 per unit increase in power tariff across the board, except for those who consume up to 50 units in a month. The decision was taken at a public hearing on fuel charge adjustment for the month of April 2011 for ex-Wapda distribution companies (discos).
According to section 31(4) of the Nepra Act (XL of 1997 and the mechanism for monthly fuel price adjustment prescribed by the Authority in the tariff determination of ex-Wapda discos, the Authority has to review and revise the approved tariff on account of any variations in the revised fuel charges on monthly basis. Based on the information provided by the Central Power Purchase Agency (CPPA), the actual fuel charges for the ex-Wapda discos are as follows: hHdel- Rs 0.2816 per unit; (ii) Coal-Rs 3.0631 per unit; (iii) RFO-Rs 14.0920 per unit; (iv) Gas-Rs 3.2353 per unit; (v) Nuclear-Rs 1.1191 per unit; (vi) import from Iran-Rs 4.2625 per unit; and (vii) mixed-Rs 11.5 per unit. The monthly adjustment of Rs 1.07 per unit in tariff will be reflected in the electricity bills of May 2011.
The government in May 2011 increased tariff by 2 percent and another 2 percent hike will be notified in the first week of June as per understanding with the International Monetary Fund (IMF). The government is also expected to increase power tariff by 12 percent during the next fiscal year aimed to minimise the differential between the existing tariffs of discos and cost recovery.
Finance Ministry, sources said, is working on this formula in consultation with Pakistan Electric Power Company (Pepco) and IMF. The government was consulting all stakeholders to amend Nepra Act for direct notification of full cost recovery from consumers. For the power sector, the subsidy regime will be eliminated from July 1, 2011. The government is to earmark Rs 148 billion for power sector in 2011-12 against Rs 239 billion of current year. The tariff differential subsidy on electricity will be eliminated over medium term while other subsidies are anticipated to remain at the existing level.