News
Tuesday, August 26, 2008
Electricity prices likely to be increased by 30 percent
* Consumers using less than 100 units a month will be exempted from the hike, GST
By Zafar Bhutta
ISLAMABAD: The government is likely to increase electricity prices by 30 percent, officials in the Finance Ministry told Daily Times on Monday. They said the National Electric Power Regulatory Authority (NEPRA) had proposed a 61 percent hike in power prices – an increase of Rs 1.4 to Rs 4 per unit for various categories of consumers. But the government – already under pressure because of rising oil and gas prices – approved a 30 percent increase and decided to pay for the remaining 31 through a Rs 65 million subsidy. The increase and the subsidy will apply to all categories of consumers. 100 units: The officials said the government has decided to increase the benchmark for “lifeline consumers” from 50 units a month to 100 units. Consumers using less than 100 units a month will be exempted from the price increase and the 16 percent general sales tax (GST) being imposed since July 1. They said that the government would pay an additional Rs 1 billion in subsidy to facilitate lifeline consumers. The government had reduced the volume of GST subsidy to Rs 3.018 billion, but would now pay Rs 4 billion in the 2008-09 fiscal year, the officials said. They said the federal government had paid Rs 21.307 billion in GST subsidy to electricity consumers in the 2007-08 financial year. The officials said the likely 30 percent increase would help power distribution companies recover the losses they had faced in the last six months. The government would adjust the electricity tariff based on oil prices on a monthly basis under a new power tariff mechanism proposed by NEPRA, the officials added.
Courtesy DailyTimes