Power consumption: Govt slaps 60 paisa per unit additional surcharge
Tariff revision will not apply to lifeline consumers
ISLAMABAD:
Even after the Lahore High Court (LHC) suspended all surcharges on electricity, the government has gone ahead with its plan to impose a 60 paisa per unit additional surcharge on power consumers in line with an agreement reached with the International Monetary Fund (IMF).
In November, Pakistani authorities told the IMF that 60 paisa per unit increase in tariff through an additional surcharge across the board except lifeline consumers using up to 50 units in a month will constitute a 4% increase in the weighted average tariffs on electricity consumers.
The National Electric Power Regulatory Authority (Nepra) has slashed power tariff by Rs2.97 per unit for November under monthly fuel price adjustment but the government decided to pass on only Rs2.37 per unit to the consumers.
The government has already imposed Re0.50 and Rs1.50 per unit surcharge to retire Rs136 billion bad debt taken by power distribution companies.
An official said that since the government cannot slash Nepra’s determined tariff, so it took a policy decision to impose a 60 paisa per unit additional surcharge.
The consumers will be paying Rs4 to Rs6 billion per annum to bail out power firms.
The current effective notified tariff is Rs11.82/kWh. This will be adjusted subject to negative Fuel Price Adjustments (FPA) to maintain the consumer prices constant.
Power Sector Holding Company Limited has to service Rs8.611 billion STCF in the first quarter, Rs6.247 billion in the second quarter, Rs7.840 billion in the third quarter and Rs5.413 billion in the fourth quarter of the current fiscal year, totalling Rs28.111 billion.
STFC Surcharge on 68,000GWh has been calculated at Rs28.111 billion which is equal to 41 paisa per unit.
Calculations are based on projected collections with FY2013-14 base case losses (18.6%) and collection rate (89.1%).
The STCF surcharge will be adjusted upward or downward depending on the timing of tariff notification to ensure that the annual STCF debt service will be fully financed within the fiscal year. Any deficit amount will be borne by the government whereas excess amount will be held by PHPL and utilised for debt service.
Overdue payables (over 45 days) stand at Rs196 billion as of September-end 2014.
Moreover, Nepra authorities have determined and notified Fuel Adjustment Charges of Rs2.97 per unit out of which Rs2.37 per unit will be passed on to all the consumers. An amount of Re0.60 per unit was required to pay for the power sector finances and notified as surcharge separately.
The net effect to end consumer is no increase in the rates and net reduction of Rs2.37 per unit.
Published in The Express Tribune, December 27th, 2014.
Even after the Lahore High Court (LHC) suspended all surcharges on electricity, the government has gone ahead with its plan to impose a 60 paisa per unit additional surcharge on power consumers in line with an agreement reached with the International Monetary Fund (IMF).
In November, Pakistani authorities told the IMF that 60 paisa per unit increase in tariff through an additional surcharge across the board except lifeline consumers using up to 50 units in a month will constitute a 4% increase in the weighted average tariffs on electricity consumers.
The National Electric Power Regulatory Authority (Nepra) has slashed power tariff by Rs2.97 per unit for November under monthly fuel price adjustment but the government decided to pass on only Rs2.37 per unit to the consumers.
The government has already imposed Re0.50 and Rs1.50 per unit surcharge to retire Rs136 billion bad debt taken by power distribution companies.
An official said that since the government cannot slash Nepra’s determined tariff, so it took a policy decision to impose a 60 paisa per unit additional surcharge.
The consumers will be paying Rs4 to Rs6 billion per annum to bail out power firms.
The current effective notified tariff is Rs11.82/kWh. This will be adjusted subject to negative Fuel Price Adjustments (FPA) to maintain the consumer prices constant.
Power Sector Holding Company Limited has to service Rs8.611 billion STCF in the first quarter, Rs6.247 billion in the second quarter, Rs7.840 billion in the third quarter and Rs5.413 billion in the fourth quarter of the current fiscal year, totalling Rs28.111 billion.
STFC Surcharge on 68,000GWh has been calculated at Rs28.111 billion which is equal to 41 paisa per unit.
Calculations are based on projected collections with FY2013-14 base case losses (18.6%) and collection rate (89.1%).
The STCF surcharge will be adjusted upward or downward depending on the timing of tariff notification to ensure that the annual STCF debt service will be fully financed within the fiscal year. Any deficit amount will be borne by the government whereas excess amount will be held by PHPL and utilised for debt service.
Overdue payables (over 45 days) stand at Rs196 billion as of September-end 2014.
Moreover, Nepra authorities have determined and notified Fuel Adjustment Charges of Rs2.97 per unit out of which Rs2.37 per unit will be passed on to all the consumers. An amount of Re0.60 per unit was required to pay for the power sector finances and notified as surcharge separately.
The net effect to end consumer is no increase in the rates and net reduction of Rs2.37 per unit.
Published in The Express Tribune, December 27th, 2014.