Federal government has increased power tariff by Rs 5.89 per Kwh or 72.6 percent (from Rs 8.11 to Rs 14 per unit) for consumers using 201-300 units per month across the country including Karachi Electric Supply Company (KESC) from October 1 (today). The total impact of increase in tariff for domestic consumers has been calculated about Rs 75 billion per annum. The government will continue to extend subsidy of Rs 200 billion per annum to the domestic consumers using up to 200 units in a month, a senior Water and Power Ministry told Business Recorder. Ministry of Water and Power issued necessary notification on Monday amid comments from the officials that the raise is considerable and will hit middle income consumers. Tariff for consumers who use 301-700 units in a month will be increased by about 30 percent to Rs 16 per unit from Rs 12.33 per unit. And those who consume above 700 units per month will pay Rs 18 per unit instead of Rs 15.07 per unit from next month. The impact of this raise will be in addition to General Sales Tax (GST). Tariff for Azad Jammu and Kashmir has been increased to Rs 14 per unit from Rs 12.22 per unit. For peak load requirement exceeding 20 KV, Time of Day (Peak) tariff will be increased by 19.44 per cent from Rs 13.99 to Rs 18 per unit, Time of Day (off-peak) from Rs 8.22 per unit to Rs 12.50 per unit and temporary domestic from Rs 15.50 to Rs 16.50 per unit, showing an increase of 52 per cent. However, tariff for consumers who use 50 units, 100 units and 200 units in a month will be Rs 2 per unit, Rs 5.79 per unit and Rs 8.11 per unit which implies that there will be no change in their tariffs. Tariff for agriculture consumer has been fixed at Rs 10.35 per unit instead of Rs 11.51 per unit. Fixed charges on agriculture meters have also been slashed from Rs 200 to Rs 120. Public lighting -tariff G - Rs 15 per unit from Rs 13.73( 9.24 percent), housing colonies attached to industrial -H, Rs 15 per unit from 12.92 per unit( 16 per cent) , railway traction Rs 15 per unit from Rs 11 per unit( 36.36 percent), ToD -peak Rs 18 per unit from Rs 13.30( 35.34 percent) and off peak Rs 12.20 from Rs 7.92 per unit( 54 percent). Tariff for Rawat Laboratory will be increased from Rs 11 per unit to Rs 15 per unit (36.36 percent). The government is expected to generate Rs 162 billion additional revenue from current power tariff increase ie Rs 74 billion from domestic and agriculture consumers, AJK, Railways and Rs 87 billion from industrial, commercial and AJK. "We were extending Rs 362 billion subsidy to consumers last year and the financial impact of current increase has been estimated at Rs 162 billion which implies domestic consumers still enjoy subsidy of Rs 200 billion," an official said. "The government will continue to extend Rs 200 billion subsidy to domestic consumers. Political parties ie Pakistan Peoples Party (PPP) Pakistan Tahreek-i-Insaf of Imran Khan and MQM have opposed current increase in tariff and vowed to protest at all fora. The current increase in power tariff is routine policy matter as per determined tariff by the National Electric Power Regulatory Authority (Nepra) and has nothing to do with IMF program. The government has tailored a four-phase plan to reduce the subsidies from about 1.8 percent of GDP to 0.3-0.4 percent of GDP in three years. The first phase entailed the almost full elimination of the subsidy for industrial, commercial, bulk, and AJ&K2 users, accomplished through an increase in tariff of about 50 percent at end-July. The majority of domestic consumers were excluded from increases at this stage. The second phase entails the elimination of subsidy for consumption over 200Kwh, SCARP3, and others (public lighting, housing schemes, railways, HVTL4), and reducing the subsidy in agriculture by about 13 percent. The corresponding price increases have already been approved and notified effective October 1, 2013 In FY 2014/15 and FY 2015/16 authorities will reduce the remaining subsidies (on agriculture and consumption below 200Kwh) in order to reduce the fiscal burden to 0.3-0.4 percent of GDP. By the end of phase four the subsidy for consumption above 200Kwh will be eliminated and it will be reduced for those below 200Kwh. While most households will see price increases, subsidies will remain for the lowest consumers and increases in targeted transfer programs will also protect the poorest.
Posted on: Tue, 01 Oct 2013 10:32:27 +0000
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