ISLAMABAD, Oct 2: The federal government is facing serious difficulties in separating and revising the electricity tariff for distribution companies of Wapda because it would have to provide a minimum of Rs33 billion subsidy, it has been learnt from a reliable source.
A senior government official told Dawn on Sunday that a September 30 deadline set by the World Bank for notification of revised power tariff has already been missed and it would require at least 15 days more to materialize.
He said the National Electric Power Regulatory Authority (Nepra) has provided a number of options to the government to take a decision how it planned to rationalize the power tariff. A decision on these options has been delayed owing to the absence of the secretary, water and power, who is currently in India for inspecting the Baglihar dam along with a World Bank-appointed neutral expert.
The secretary will return on October 8 and then a formal summary would be submitted to the federal cabinet for taking a decision on the quantum of subsidy on power tariff.
The official said the size of the government’s subsidy, currently estimated at Rs33 billion, will go on increasing with each passing day as long as the introduction of separate tariffs for distribution companies was kept being delayed.
He said the government did not notify the tariff reduction determined by the Nepra last year to provide a windfall benefit to Wapda companies. However, the savings earned over the last six months have now started turning into losses and increased subsidies.
Last year, the separation of tariff of various companies was estimated to require about Rs68 billion in subsidies. However, by maintaining a higher than Nepra-determined tariff the government has been able to reduce the subsidy factor to Rs33 billion.
It has emerged through in-house deliberations that the current level of line losses of power companies be allowed to be recovered from the consumers for the next six months and then the distribution companies be asked to meet a certain loss reduction target gradually before the next biannual tariff revisions.
The official said the government was finding it politically difficult to allow significant increases in the tariff of the loss-making Hyderabad, Quetta, Peshawar and Multan electric supply companies compared with the Lahore, Islamabad, Gujranwala and Faisalabad Electric Supply Companies where tariffs were expected to come down as a result of their separation from Wapda.
