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Energy Division tables plan to freeze tariff

by News Updater
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 PHOTO: REUTERS

PHOTO: REUTERS

ISLAMABAD: The Energy Division tabled a plan earlier than the Cupboard Committee on Power (CCOE) for freezing energy tariff for the subsequent six months within the wake of coronavirus-related lockdown, a plan which can imply going to multilateral donors to lift one other Rs150 billion.

The CCOE thought of the plan in its assembly held on March 27 however didn’t take any determination.

Sources instructed The Specific Tribune that the Financial Coordination Committee (ECC) would now contemplate the plan in its upcoming assembly for approval.

The Energy Division proposed that the CCOE ought to chorus from any enhance in shopper payments with a view to mitigate the influence of volatility attributable to month-to-month gas price adjustment and quarterly tariff adjustment.

The CCOE was knowledgeable that the Energy Division had calculated an influence of Rs73 billion due to the gas price adjustment and Rs77 billion attributable to non-realisation of quarterly adjustment. As these prices wouldn’t be handed on to shoppers, the Energy Division mentioned, the move of power-sector round debt would enhance.

In a bid to maintain the tariff unchanged for the subsequent six months, it was proposed that the federal government might method the Worldwide Financial Fund (IMF) to hunt its approval and have interaction with different multilateral donors just like the World Financial institution and the Asian Growth Financial institution (ADB) with a view to elevate Rs150 billion to fill within the financing hole.

There are some pending tariff determinations which might be required to be handed on to the shoppers. In accordance with officers, the ability tariff can soar to Rs24 per unit if all of the pending tariff revisions are handed on to the shoppers.

At current, the common shopper tariff together with revenue taxes and surcharges stands at Rs18.65 per unit, which incorporates Rs4 on account of taxes, duties and surcharges.

A number of electrical energy tariff revisions have been made by the Nationwide Electrical Energy Regulatory Authority (Nepra), that are attributable to be notified by the federal government. If these are notified, the electrical energy tariff would hike to Rs24.47 per unit in comparison with the prevailing tariff of Rs18.65, sources instructed The Specific Tribune.

The typical shopper tariff stood at Rs15.36 per unit in January 2019, which jumped to Rs18.65 now on account of quarterly changes and month-to-month gas price revisions. Nepra had decided a tariff enhance of Rs1.61 per unit for the second quarter of present monetary 12 months 2019-20. A tariff revision of Rs2.44 per unit was due on account of gas value adjustment for December 2019 and Rs1.76 per unit on account of gas price adjustment for January 2020.

The Energy Division proposed that the tariff ought to be frozen for the subsequent six months as a result of coronavirus outbreak. The Finance Division, in collaboration with the Planning Fee, Financial Affairs Division and Energy Division, might take up the matter with the IMF and different multilateral donors.

Nonetheless, the CCOE didn’t approve the proposal, fearing an additional enhance within the round debt, which was a serious drawback for the ability sector.

Printed in The Specific Tribune, March 31st, 2020.

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