Electricity Prices: 60 percent increase imminent

[LRE]

60 percent increase imminent
MUSHTAQ GHUMMAN
ISLAMABAD (August 23 2008): Sixty percent increase in electricity prices, over and above 16 percent raise already passed on to the consumers with the withdrawal of GST exemption, is expected to be announced shortly. Sources told Business Recorder that the National Electric Power Regulatory Authority (Nepra) was recommending about 61 percent increase in the electricity tariff which the government wanted to pass on to consumers immediately.

In June, the finance ministry had briefed the Cabinet that power tariff would touch Rs 10 per unit after the upward revision, however, the Secretary Water and Power was of the view that lower income levels would be protected. "It would be a hefty increase targeted to remove Pepco's growing financial difficulties," a senior finance ministry official said requesting anonymity.

He was of the view that Wapda has to make payments to Independent Powers Producers, which were threatening to shut down their power plants because of non-payment. Replying to a question, the official said that the government cannot allow IPPs to invoke sovereign guarantees as overdue amounts would be cleared by the Pepco through this increase in tariffs. "Pakistan has to survive as a normal country and it is also in favour of IPPs," the official maintained.

He said that all government subsidies, including those on oil and electricity will be eliminated by June 2009 and the consumers will have to share the burden of increased prices for all products. The Pepco's circular debt was increasing which would have to be cut by allowing increase in electricity charges, he added.

Copyright Business Recorder, 2008