PM halts hike in power tariff

Govt to to continue with subsidies for domestic and agricultural consumers

ISLAMABAD: Having faced serious political fallout due to increasing electricity tariffs, Prime Minister Nawaz Sharif has directed the government to maintain electricity prices at the current level, ignoring Nepra’s recommendation for an increase.

The government has also decided to continue with subsidies for domestic and agricultural consumers to lessen the burden of expensive energy mix in power generation.

The decision has been taken by the prime minister to provide relief to consumers, especially domestic consumers, an official handout said.

The average national tariff determined by Nepra for the year 2013-14 was Rs13.81 per unit while the current average national tariff is Rs11.52 per unit.

Recently, the government had notified a 29 paisa per unit equalisation surcharge which was intended to offset a reduction of 30 paisa per unit due to fuel price adjustment resulting in zero impact on consumers.

The power generation in the country is predominately run on expensive fuel which results in higher generation cost and higher tariff to be paid by the end consumers.

According to the handout, the government is making all-out efforts to absorb the impact of higher tariffs and pass on minimum impact to end consumers.

The power generation mechanism has also been lined up to ensure running of least expensive plants first and expensive plants later to ensure that minimum fuel charges are passed on to the consumers.

New projects with an expected capacity of 10,400 MW are being pursued based on cheaper sources of fuel like coal and hydropower, which will result in reduction in cost of generation in the coming years, the government added.


Published in The Express Tribune, October 22^nd, 2014.