Notification on hike in power tariff withheld

ISLAMABAD: The notification on raising power tariff by 13.6 percent has been withheld due to difference between government and coalition parties on the issue.

Under an agreement with International Monetary Fund (IMF), government has to raise the power tariff by 13.6 percent.

The government had allocated Rs 66 billion for power subsidies in the ongoing budget with an additional allocation of Rs 55 billion after an approval from the IMF.

Sources said the tariff for lifeline consumers would now be increased from Rs 1.6 to Rs 2 per unit and for agricultural tube wells by up to Rs 1.5 per unit.

They said the government provided Rs 14.6 billion subsidy for lifeline customers and Rs 42.2 billion for agricultural tube wells.

Under IMF’s conditions, the government has agreed to raise the power tariff by 24 percent during the current fiscal year in three phases – six percent in the October-December quarter, 12 percent in January-March and six percent in the April-June period.

A 4.4 percent tariff increase was announced in October, and the current tariff hike of 13.6 percent will achieve the targeted 18 percent tariff hike in the two periods.

The government is also under pressure from the IMF to reduce transmission and distribution losses and improve the efficiency of the power supply system.

During the current quarter, the Pakistan Electric Power Company (PEPCO) acted against 54,320 customers, including 28,200 reports lodged with the police, and recovered Rs 3.1 billion, the sources said.