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    Lenders pressure: Power tariff to be raised by upto Re0.95 unit

    January 18, 2022 - Nation


      Under pressure from the international lenders, the government is once again increasing the electricity rates by upto Rs 0.95/unit, taking the base power tariff to Rs 18.75/unit for some residential consumers.

      Under the Re-Targeting of Power Sector Subsidies Phase -II, the federal government plans to withdraw Rs 20b annual subsidy from unprotected residential consumers , which will increase the base tariff by upto Rs 0.95/unit from February 1. However, the average increase in base tariff will be Re 0.53/unit.

      In a petition submitted to National Electric Power Regulatory Authority, for the policy guidelines for re-targeting the power sector subsidies phase-II, the Ministry of Energy had sought the regulator nod for removal of one slab benefit (Incremental Block Tariff) and incorporation of revised subsidy and inter distribution companies tariff rationalization/cross subsidies through modification/adjustments in the Discos SoT as well uniform SoT as was determined by the regulator. The Phase-I provided expanded definition of lifeline consumers, creation of new categories of consumers (protected and unprotected) and restructuring of 301-700 units slab without changing effective tariff.

      As per the petition for phase-II, for the protected residential consumers using upto 200 units/month there will be no change in base tariff, however for the unprotected consumers using 1 to 700 units/month the tariff will go up from Re 0.08/unit to Re 0.95/unit. For the unprotected consumers using 1-100 units the increase will be Re 0.08/unit, for 101-200 it will be Re0.18/unit, for 201-300 the hike will be Re0.48/unit and for the categories using 301 to 700 units the per unit increase will be Re0.95/unit.

      The decision will take the base tariff of the consumers using up to 100 units from the existing Rs 9.42 to Rs 9.50/unit, of 101-200 units from Rs10.18 to Rs 10.36/unit, of 201-300 from Rs 12.14 to Rs 12.62/unit, for the consumers with 301 to 400 units from Rs 14.78 to 15.75/unit, for 401 to 500 units from Rs 16.24 to Rs 17.19/unit, for 501 to 600 units from Rs 17.16 to Rs 18.11/unit, and for 601 to 700 units it will increase from the existing Rs 17.80 to Rs 18.75/unit. For the consumers using above 700 units there will be no change and the base tariff would remain at Rs 22.22 per unit. It is worth mentioning here that the Economic Coordination Committee (ECC) of the Cabinet had last month approved the Re-Targeting of Power Sector Subsidies Phase -II along with dividing agriculture tube-wells slab into two categories and reforming/gradually decreasing subsidies to QESCO tube-wells by subsidizing solarization/ modernization of tube-wells for agricultural consumers.

      As per the petition, the Phase II of the subsidy reforms entails gradual reduction in total net subsidy for unprotected residential consumers, reduction in cross-subsidy and removal of previous slab benefit. Similarly for agricultural consumers, the division of agriculture tube-wells slab into two categories and reforming / gradually decreasing subsidies to QESCO tube-wells by subsidizing solarization I modernization of tube-wells has been proposed.


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