November 14, 2008	Friday	Ziqa'ad 15, 1429

ISLAMABAD, Nov 13: The recent increase in power tariff by 31 per cent was revised down to 13 per cent on Thursday on the recommendations of a special committee formed by the government after countrywide protests.

Although the average increase was 31 per cent, for consumers in higher slabs it had gone up by over 70 per cent.

“Consumers using up to 450 units will now get a substantial reduction in their bills, compared to the bills issued in September,” said a water and power ministry announcement.

Sources told Dawn that the special committee, headed by Minister of State for Finance and Revenue Hina Rabbani Khar, had proposed a five per cent increase in power charges.The committee was of the opinion that the reason cited for the increase was rise in fuel prices but the decision was taken at a time when crude prices in the international market were falling sharply.

The sources said that the committee had also observed that power distribution companies had failed to control line losses and consumers were suffering because of their inefficiency.

While details of the new tariff structure will be announced on Friday, according to the National Electric Power Regulatory Authority (Nepra) the new rates would be applicable from next month.

The government allowed consumers last month to pay only 60 per cent of their bills and set up the committee to review the tariff. The 40 per cent reduction cost the government Rs40 billion — Rs31 billion it paid to the Pakistan Electric Power Company (Pepco) and Rs9 billion to the Karachi Electric Supply Company (KESC).

On account of the downward revision, the government will have to provide Rs77 billion subsidy on electricity during the current financial year — Rs65 billion to Pepco and distribution companies and Rs12 billion to the KESC.

The water ministry said that under the new relief package, there would be no increase in bills of life-line consumers.

The government has also decided to ‘carry over’ lower slab rates to higher slabs. For instance, if a consumer crosses the 100-unit slab by consuming 150 units, he will not be charged uniformed rates for the total consumption.

The charges for the first 100 units will be lower and increased rates of the new slab will be charged for additional 50 units.

During the last increase, the government had removed the slab system.