ISLAMABAD, Jan 14: Tariff for the Karachi Electric Supply Corporation (KESC) consumers has been reduced by an average of 8.74 paisa per unit under the quarterly fuel adjustment formula.

The National Electric Power Regulatory Authority (Nepra) determined here on Wednesday that reduction in furnace oil price and availability of additional gas during the previous quarter (Sept-Dec 2003) had brought down the annual fuel bill of the KESC to the tune of Rs6.87 billion.

According to new tariff adjustment by Nepra, rates for commercial consumers of the KESC have been reduced by 12 paisa per unit, while for bulk consumers a 10 paisa per unit cut has been made.

Tariff for residential consumers and agriculture sector has been decreased by five paisa per unit. However, there would be no change in the tariff of lifeline residential consumers consuming up to 50 units per month and it remains at Rs1.40 per unit.

Nepra determination has been forwarded to the federal government for formal notification. The regulatory authority said that it took into consideration decrease in the utility's fuel cost. During the previous quarter, there has been a reduction in the prices of furnace oil, whereas the overall use of furnace oil has also reduced due to increased availability and use of natural gas.

It said reduction for commercial and industrial consumers was kept higher as compared to residential and agriculture consumers as part of the government policy to phase out cross-subsidization in various consumer groups.

Under the automatic tariff adjustment mechanism, electricity tariffs are reviewed every three months. The next quarterly review would become due in April 2004.