Nepra allows up to 86 paisa raise in tariffs

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (May 14 2009): The National Electric Power Regulatory Authority (Nepra) has allowed the power distribution companies (discos) to raise tariff up to 86 paisa per unit across the board except those life line consumers using only 50 units in a month. Pakistan's negotiators', who were in Dubai a couple of days ago, agreed with the International Monetary Fund (IMF) to increase power tariff by 10 percent, in two phases.

The lowest increase in tariff has been proposed for the consumers of Gujranwala Electric Power Company (Gepco) who are supposed to be charged 18 paisa per unit, while the highest raise of 86 paisa per unit is for the consumers of Peshawar Electric Supply Company (Pesco), however power tariff for the consumers of Quetta Electric Supply Company (Qesco) has been reduced by 84 paisa per unit.

According to monthly adjustment of power purchase price (PPP), 46 paisa per unit tariff increase has been recommended for the consumers of Lahore Electric Supply Company (Lesco), 42 paisa for Hyderabad Electric Supply Company (Hesco) and Multan Electric Power Company (Mepco), 44 paisa for Islamabad Electric Supply Company (Iesco), and 39 paisa for Faisalabad Electric Supply Company (Fesco).

Nepra is also in the process of finalising annual adjustment in tariff in line with the agreement already signed by the government of Pakistan (GoP) and IMF. As a first step under this plan, tariffs were increased by one percent, effective February 1, 2009. Discos' tariffs will be further raised to result in a cumulative increase of 10 percent by the end of June.

Under Nepra Act, amended in the Finance Bill 2008-09, the power regulator has been empowered to come up with on monthly basis power tariff adjustments. Earlier, Nepra used to come up with fuel adjustments in power tariff on quarterly basis. Now, the government has committed to the IMF that it would continue revising the power tariff on monthly basis to pass on any upward revision in furnace oil price to the consumers.

Officials in the Finance Ministry were disturbed over the unresolved issue of inter-circular debt and now the government has agreed with the IMF that it would float Sukuks of Rs 75 billion for five years period to generate the liquidity for resolving the serious issue. Advisor to Prime Minister on Finance, Shaukat Tarin, is cited as having said that the government would launch first Sukuk bond valuing Rs 25 billion in Dubai, and then also go for Rs 50 billion.

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