LAHORE, Jan 9: Wapda notified on Thursday 12 to 19 paisa per unit power tariff reduction, announced by the government on Dec 10.

As the relief was effective from Dec 10, 2002), bills already issued would be adjusted next month.

The average reduction of 13.47 paisa per unit would cost the authority Rs3 billion, raising its annual loss from Rs18 to 21 billion for the current fiscal.

According to the government package, the domestic consumers would get a relief of 12 paisa per unit and industrial and commercial consumers 19 paisa per unit.

While appreciating the government’s decision, most of the power sector experts on Thursday said: “The most important question is how the authority meets the resulting deficit.”

The government and Wapda must ensure that cost of the tariff reduction was recovered through efficiency gains rather than the beaten path of tariff increase, they said.

“If the authority can reduce its losses by even one per cent,

it should be able to bridge the gap created by the tariff reduction,” says a former member, power.

“There are more than one ways to calculate the cost of Wapda’s line losses. If one assumes that it were technical losses, the cost could be around Rs1.5 billion (fuel cost for generating 600mkwh).

“But if it is presumed that losses were caused by theft, one can reach two different costs. If those units are stolen by domestic consumers, the cost could be Rs2.5 billion.

“But if the same loss is presumed to be commercial, the loss goes up to Rs4 billion,” he said.