No let up in price hike; power tariff to rise 17% from July 1

ISLAMABAD: The withdrawal Rs65 billion subsidy on electricity announced in the federal budget is likely increase the power tariff by 17 per cent from July 1. According to the figures released by WAPDA, Pakistan Electric Power Company (PEPCO) is facing a deficit of Rs400 billion. The report sent to the government by PEPCO prior to the announcement of the budget said the power tariff was kept frozen during the 5-year term of former prime minister Shaukat Aziz while the subsidy has been completely withdrawn in phases. The report says that electricity will be expensive by 17 per cent from July 1, 2009. The per unit rate for domestic consumers will surge to Rs7.50, commercial Rs13 and for industrial consumers Rs11. WAPDA is likely to receive revenue of Rs125 billion from the hike in electricity rates. This will help reduce PEPCO’s deficit besides clearing the arrears of IPPs, PEPCO officials said. Gas tariff has been eased only by Rs24 per MMBTU instead of Rs90 and this rate will be effective from July. However, the Federations and Chambers have rejected it, announcing protest against it from July.