Islamabad (October 25, 2018): Federal Finance Minister Asad Umer said that the electricity rate for domestic consumers has been increased by Rs1.27 per unit. The increase in power tariff will not affect domestic consumers using below 300 units.
Finance Minister Asad Umar along with Power Minister Umar Ayub and Fawad Choudhry on Thursday briefed the media on the revised power tariff for domestic consumers, which was decided upon during a meeting of the Economic Coordination Committee held yesterday.
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Umar confirmed that the electricity rate for domestic consumers has been increased by Rs1.27 per unit; however, households consuming less than 300 units of electricity will not be impacted by the increased tariff, he said.
The tariff for domestic consumers using up between 300 and 700 units of electricity has been increased by 10 percent. Households consuming more than 700 units of electricity will see a 20% increase in the tariff, the finance minister informed.
The minister further informed that commercial users with less than 5kv have been exempted from the increase in power tariff. It will only affect five percent of major industrial units.Umar said that Nepra in its evaluation had recommended a fee unit increase of Rs3.82. “This determination was completed in August before the PTI government came into power. According to the decision taken in yesterday’s ECC meeting and approved by the cabinet, the price increase will be Rs1.27, not Rs3.82.”
He said the main aim of the government is to reduce the deficit and increase country’s exports.
Umar explained that Pakistan’s economy had weakened because of massive losses in the energy sector, and the revised tariff was part of the government’s efforts to address the issue.
On Pakistan’s approach to the International Monetary Fund, Umar said it was very easy to sign the IMF documents but the government was working on securing alternate means of funding. IMF contracts impact the entire financial system [of a country], he said.
Also, the government has decided to install meters on transformers to identify power theft.Federal minister for power division Omar Ayub said that these measures began from Islamabad and Lahore. “The estimate for power theft is rs250 billion, while amount for payable bills have reached 800 billion”, he said.
The minister said that the public is facing this burden of the bills.
He emphasised the need to increase exports and remittances to avoid returning to the International Monetary Fund in the future (IMF).
In order to give a boost to the agriculture sector, the government has also drastically cut the electricity prices for the agriculture sector, bringing down the per unit price by Rs5 to Rs5.35 per unit.
It has also protected the small and medium commercial consumers from the hike. The schools and hospitals have also been exempted from the increase, said the Power Division.The Economic Coordination Committee (ECC) of the Cabinet approved to increase the average electricity prices by at least Rs1.20 per unit or 10.3% to Rs12.91, according to the government officials.
Earlier on October 24, the Economic Coordination Committee (ECC) of the Cabinet approved to increase the average electricity prices by at least Rs1.20 per unit or 10.3% to Rs12.91, according to the government officials.
The decision will help the government to recover minimum Rs123.6 billion from the consumers on account of tariffs. In addition, the consumers will also pay Rs21 billion additional sales tax.