The federal government has increased power tariff by 2 percent per unit across the board aimed at minimising the gap between the cost and delivery to the end consumers. This raise has been notified at a time when the country is facing the worst ever load shedding especially in villages.
Analysts argue that the timing of the tariff raise - just before the departure of Pakistan''s economic team for Dubai for talks with the International Monetary Fund (IMF) scheduled to start on 11 May - is significant. According to the notification, domestic consumers who are using 100 units a month will have to bear the brunt of additional 8 paisa per unit.
However, electricity tariff for those consuming 100-300 units has been raised by 13 paisa per unit, by 21 paisa for those who consume up to 700 units and 27 paisa for those who use more than 700 units in a month. Consumers using 11 kilowatts temporary supply will pay 21 paisa per unit more than the existing tariff.
Reports suggest that the current increase will be effective from April 15, 2011, but an official of the Ministry of Water and Power said that the increase will be effective from the date of notification which is May 6, 2011. The current increase in tariff will be followed by another two percent hike in June this year.
The government had earmarked Rs 84 billion in the federal budget 2010-11, of which Rs 10 billion was for the Federally Administrated Tribal Areas (Fata), Rs 30 billion for tariff differential, Rs 4 billion as General Sales Tax (GST) refund and Rs 40 billion for interest payment on Term Finance Certificates (TFCs) issued by the Power Holding Company Limited (PHCL). Last year, initially Pepco had projected Rs 265 billion shortfall which was reduced to Rs 239 billion.