20pc increase in power tariff likely from June

Wednesday, February 18, 2009

By Jawwad Rizvi

LAHORE: The Pakistan Electric Power Company (Pepco) has sought 20 per cent increase in power tariff, which is expected to be implemented from June 2009. Pepco had already increased the power tariff for the domestic consumers by 54 to 108 per cent during the last two years and increased its revenue generation up to Rs 300 billion with this increase. The News has learnt that Pepco has requested the government to further increase the power tariff to pay off the circular debts of the company, which had emerged after four years of stagnant power tariff (2003-07) during the previous regime. Official notifications of Pepco showed that the power tariff for 100 units and below consumers had increased by 54 per cent, up to 300 units 70.27 per cent, up to 400 units 68.91 per cent, up to 500 units 68.46 per cent and up to 1,000 units and above 108.06 per cent. The bill of 100-unit consumers inclusive of all taxes in February 2007 was Rs 269.61 which has now been increased to Rs 415. The bill of 300 units was Rs 966, which has reached Rs 1,599, for 400 units the bill has increased to Rs 2,547 from Rs 1,508, 500 units bill to Rs 3,495 from Rs 2,076, 700 units bill to Rs 5,392 from Rs 3,211 and 1,000 units bill to Rs 8,267 from Rs 3,971. The per unit price for 100-unit consumers in 2007 was Rs 2.69 that has reached Rs 4.15, for 300-unit consumers it was increased from Rs 3.13 to Rs 5.32, for 400 units from Rs 3.77 to Rs 6.36, for 500 units from Rs 4.15 to Rs 6.99, for 700 units from Rs 4.58 to Rs 7.70 per unit and for 1,000 units from Rs 3.97 to Rs 8.26 per unit. Sources in the Finance Ministry said in June the unit price would be again raised for every slab with 20 per cent increase in tariff. They said the government had already committed to the International Monetary Fund to waive all subsidies from electricity and petroleum products. Therefore, the government will announce the new electricity tariff in June. According to the consumption-based billing formula used in the world, the unit price decreases with an increase in consumption, while in Pakistan it is exactly the opposite as the unit price increases with the increase in consumption.