Govt all set to hike power tariff by Rs1.25 per unit today

ISLAMABAD: The government is trying hard to notify by today (Wednesday) an increase in the power tariff by an average Rs1.25 per unit (16 percent) for electricity consumers under schedule-II.

The increase in tariff will help the government fetch Rs7.8 billion in additional revenue in the month of June, a senior official at the Ministry of Water and Power told The News.

The notification is likely to be issued by today (Wednesday) if the ministry itself decides to issue the notification; however, if the ministry sends the draft notification to the Law Division for validation, the power tariff raise will be notified within a span of one week.

According to top officials at the ministry of water and power, the summary is ready to be notified and the notification is most likely to be issued today (Wednesday).

There are two options currently being discussed among the top functionaries in the ministry; these include whether the ministry should itself notify the raise in power tariff or seek validation from the Ministry of Law.

Senior mandarins are of the view that the ministry should itself notify the increase in power tariff as a further delay will not help achieve the target to reduce the inter-differential tariff subsidy which stands at Rs300 billion. A water official said with the increase in notified power tariff by Rs1.25 per unit the inter-differential tariff subsidy would be reduced from Rs300 billion to Rs210 billion.

The existing notified tariff stands at Rs7.30 per unit and with the increase of Rs1.25 per unit, will swell up to Rs8.55 per unit. However, the gap between generation cost and notified tariff would now stand at Rs3.55 per unit as Nepra has worked out the electricity generation cost at Rs11.55 per unit.