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ISLAMABAD: After having raised gas prices, the PTI government is working on a proposal to increase electricity tariff by an average of Rs2 per unit to partially finance the ever-rising circular debt.
A meeting of the Economic Coordination Committee (ECC) of the cabinet has been called on Tuesday to take up a two-point agenda — electricity tariff and presentation on LNG (liquefied natural gas) terminals — sought by the power division and petroleum division, respectively.
The ECC also agreed to sever all illegal electricity connections within three months. A decision to install prepaid electric meters was also taken. The committee also resolved to take immediate action against power-sector defaulters, including ministries and government departments.
A senior official told media that the power division was seeking an approval for implementation of National Electric Power Regulatory Authority’s (Nepra) determination suggesting a gross increase of Rs3.90 per unit in consumer tariff under relaxed benchmarks for ex-Wapda distribution companies (Discos).
The ECC observed that the PML-N government had taken decision to discontinue the provision of subsidised power supply to AJK in budget 2018 and the previous government had also decided to discontinue the industrial support package. The committee decided to bring the facts to the notice of the cabinet.
Under the Nepra, the average tariff has been increased to Rs15.45 per unit from Rs11.50, following the resolution of all outstanding issues pending before courts or at various levels of settlement or late notifications on account of prior-year adjustments, capacity payments, net hydel profit and additional power purchases.
After considering the amount of subsidy earmarked in the budget, the net increase in average consumer tariff has been worked out at about Rs2 per unit with a total impact of Rs200 billion.
While announcing up to 143% increase in gas prices last week, Petroleum Minister Ghulam Sarwar Khan had said his ministry was not satisfied with LNG matters finalized by the previous government and “seriously examining” issues relating to LNG terminals.
Prime Minister Imran Khan had already given a go-ahead for notification of base tariff increase for Discos on the basis of a briefing given by the power division and Nepra with an impact of about Rs2 per unit or Rs200 billion on the existing power rates.