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| 10 December 2004 | Friday | 27 Shawwal 1425 |
Govt refuses to approve Nepra tariff hike
ISLAMABAD, Dec 9: The federal government has decided not to notify the power tariff approved thrice by the National Electric Power Regulatory Authority (Nepra) for eight distribution companies (Discos) of Wapda, it is learnt.
Instead, the government would issue fresh policy guidelines to Nepra to accept an average 20 per cent line losses of Discos as prudent cost to be charged from consumers as against 15pc allowed by Nepra and announce "a comprehensive tariff review" by end of January next year. This is expected to increase consumer tariffs, sources said.
A decision to this effect was taken here at a meeting attended by Nepra chairman Lt-Gen Saeed-uz-Zafar, the Private Power and Infrastructure Board (PPIB) managing director, federal secretary and special secretary of the Water and Power Ministry. Federal Minister Liaqat Ali Jatoi presided over the meeting.
Informed sources told Dawn that Prime Minister Shaukat Aziz had also agreed to "this logical way" of handling the tariff imbroglio because the tariff which should have been made effective in August this year had got delayed to the extent that quarterly automatic fuel adjustment in tariff had become due in January.
The World Bank, which was informed about the decision the same day, has also given its concurrence, the sources said. On an informal advice from Nepra, the government has conceded that it would look awkward to notify an average tariff reduction with huge subsidies in December (which would be practically billed to consumers in January) and then revise it upward on account of higher fuel bill in January again.
It was felt that it would not only be politically imprudent to change tariff all too frequently but also the industrial sector would face difficulties in projecting its input costs and profit margins.
Nepra had originally determined tariffs of all Discos in July this year, specifying the amount of subsidy to be picked up by the government to maintain a uniform tariff for all on separation of all Discos from Wapda. The tariffs for industrial and agricultural consumers were slightly reduced.
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