ISLAMABAD: The government raised the electricity tariff on Wednesday by around 16 per cent.

The lifeline consumers using up to 50 units per month have been exempted from the increase which will raise an additional Rs88 billion.

According to a notification issued by the ministry of water and power, the tariff for domestic consumers of up to 100 units has been raised by 71 paisa to Rs5.25 per unit. They will also have to bear an additional burden of fuel adjustment charges for February and March in their next electricity bills.

The tariff for domestic consumers of 101-300 units has been increased by Rs1.07 to Rs7.93 per unit.

The tariff for 301-700 units has been increased by Rs2.12 to Rs12.77 per unit and for more than 700 units to Rs15.41 per unit.

Commercial, industrial and agriculture sector consumers will face a massive increase in power tariff.

An official of the ministry of water and power has justified the increase, saying the tariffs had not been revised since March 15 last year. “The increase was necessary to reduce the circular debt and the government is paying a subsidy of more than Rs3.04 per unit.”

He told Dawn the average cost of a unit was Rs11.01, but the government would charge an average of Rs8.87 even after the latest increase.

The official said the subsidy would still amount to between Rs250 billion and Rs300 billion.

The tariff for markets, shopping plazas, offices and small business units has been increased by Rs2.08 per unit.

The industrial sector will have to pay Rs1.96 per unit more, while the tariff for agricultural tube-wells has been raised by Rs1.61 per unit.

The ministry officials have estimated that the latest hike of up to 16 per cent would help generate around Rs88 billion.

Sources in the water and power ministry said it had been estimated that electricity generation from the current summer to the next season would be around 68 billion to 70 billion units against a target of 90 billion units in summer next year.

Commercial consumers of a sanctioned load of up to 5kw will now have to pay Rs15.08 per unit and those with a load exceeding 5kw Rs10.22 per unit, besides additional fixed charges of Rs367.

Industrial consumers using up to 5kw will have to pay Rs10.86 per unit and those with 6-500kw (at 400 volts) Rs9.55 per unit with additional fixed charges of Rs367.

B1 consumers under the head of ‘industrial consumer’ will have to pay Rs350 per month, B2 consumers Rs2,000 per month, B3 consumers Rs50,000 per month and B4 consumers Rs500,000 per month as the fixed minimum charge.

Agricultural consumers under D-1 (a) category using less than 5kw will have to pay Rs10.08 per unit, the owners of tube-wells under category D-2 Rs6.92 per unit with additional fixed charges of Rs105 per month and tube-wells under category D-2 Rs6.92 per unit with additional fixed charges of Rs105.

Agricultural consumers using more than 5kw under category D-1 (b) will have to pay Rs6.61 per unit.

The consumers will also pay General Sales Tax of Rs11.33.

The tariff increase will apply across the country, including Karachi.

Payment: As per a decision taken by President Asif Ali Zardari at a meeting last week, the ministry of finance has released Rs3 billion to the ministry of water and power for payments to the PSO to ensure additional supply of furnace oil to power producers.

“The amount is significant because power producers would now be in a position to give something more to the PSO for purchase of furnace oil,” said an official of the water and power ministry.

“We had demanded Rs10 billion. We will write a letter to the finance ministry for the release of another Rs7 billion.”

The official said the system was still facing a shortfall of around 4,000MW per day, which translates into around 10 hours of loadshedding across the country.

“More availability of furnace oil will help generate additional electricity and reduce loadshedding,” he said.

However, as per the circular debt position forwarded to the petroleum ministry by the PSO its total outstanding on Wednesday was Rs202.01 billion, out of which Rs192.74 is directly related to the power sector.

The PSO has pointed out that it has to pay around Rs181.46 billion to oil refineries and Kuwait Petroleum for procuring various petroleum products.