ISLAMABAD: Despite 17% decline in power generation cost, the Economic Coordination Committee (ECC) of the Cabinet, under the chairmanship of Federal Finance Minister Ishaq Dar, has decided to three separate surcharges to be imposed on electricity to keep tariffs at the current level.
The ECC, in a bid to reduce its subsidy bill by Rs100 billion for the upcoming financial year, approved the Water and Power Ministry’s proposal. The three surcharges, collectively equal to Rs1.97 per kilowatt-hour, will keep prices at their current level. Among the surcharges is a Rs0.95 per unit electricity equalisation surcharge, a Rs0.59 per unit tariff rationalisation surcharge, and a Rs0.43 per unit debt servicing surcharge.
As a result, the average tariff charged to customers of the state-owned power distribution companies will stay at Rs11.95 per kWh instead of coming down by 17% to an average of Rs9.95 per unit.
According to the National Electric Power Regulatory Authority (Nepra), the weighted average cost of power generation in the country, referred to as the ‘determined tariff’, was Rs13.83 per kWh for fiscal year 2015, a number that is expected to come down to Rs12.50 per unit in fiscal 2016.
The ECC decided to allow the import of an additional 150,000 tons of urea fertiliser for the winter growing season. The Industries Ministry requested an increase in the subsidy on sugar during the month of Ramazan for sugar sold at the Utility Stores Corporation. The ECC approved the increased subsidy on sugar from Rs3 per kilogram to Rs5 per kg.
Meanwhile, the ECC also considered the proposal submitted by the Water and Power Ministry to empower the provinces in setting up renewable energy projects.
