ISLAMABAD, Sept 9: The government increased on Tuesday electricity tariff by up to an unprecedented 40 per cent for all consumers with immediate effect.

Sources told Dawn that a notification was issued by the ministry of water and power late in the night, but it was not made public.

The tariff raise will apply to all the eight loss-ridden distribution companies of the Pakistan Electric Power Company at uniform rate to enable them to overcome their financial difficulties.

The sources said the tariff increase ranging between 10 and 40 per cent had been allowed for domestic, agricultural, commercial and industrial consumers in such a manner that the average raise would come to about 31 per cent.

The domestic consumers using less than 100 units per month have been exempted, but those consuming over 700 units would face an increase of over 40 per cent.

The sources said that since the government had already imposed 16 per cent general sales tax on electricity consumption, the real increase would, in some cases, be about 60 per cent or on an average Rs3 per unit, though it would range between Rs2-5 per unit.

Soon after the budget announcement in June, the government had raised electricity rates by 16 per cent by imposing general sales tax on power consumption.

The tariff structure has also been changed in such a manner that the exemption available for the first slab would not be available to consumers in higher slabs. The tariff for the second slab of 100-300 units will be 10 per cent higher but the consumers will not get the benefit of the first slab, which means that if 101 units are consumed the second slab rates will apply.

The rates for domestic consumers of 300-700 units per month have been jacked up by about 20 per cent, but they will not get the benefit of the first two slabs. So practically, they will have to pay about 26 per cent more than the existing rates. Likewise, the consumers using more than 700 units will be charged at 40 per cent higher rates but the real increase would come to about 50 per cent because they would not get the benefit of the first 700 units.

The change in power rates on the basis of new consumption policy has been introduced on the instructions of international lenders in what the officials claimed was a way to reduce subsidies.

The sources said the commercial and industrial consumers would be charged an average 30 per cent higher rates while the increase for agricultural consumers had been restricted to about 20 per cent. However, the rates for bulk power purchasers, public lighting and streetlights had been increased by more than 50 per cent, the sources said.

The Nepra had determined up to 76 per cent increase in electricity rates on August 23 but the government decided to stagger it in two phases.