ISLAMABAD: With people reeling from an unbearable 14 per cent inflation, two energy sector regulators allowed on Wednesday an increase of over 10 per cent in electricity tariff and about 3.5 per cent in natural gas charges.

The tariff determined by the National Electric Power Regulatory Authority (Nepra) seeks an increase of Rs1.07 per unit with immediate effect for all consumers of Wapda`s distribution companies to offset the rise in fuel cost in April. The Oil and Gas Regulatory Authority (Ogra) forwarded to the federal government its tariff determination, an average increase of Rs7.56 per unit in gas charges for all consumers of Sui Northern Gas Pipelines Limited (SNGPL) with effect from July 1. It also allowed Rs5.08 per unit increase in the average tariff for all consumers of Sui Southern Gas Company Limited (SSGCL) with effect from July 1.

Nepra took the decision after a monthly public hearing on a petition filed by the Central Power Purchase Authority (CPPA) on behalf of the distribution companies of Wapda. The increase will apply on electricity bills for May.

KESC consumers and those using less than 50 units a month have been exempted from the increase. At the hearing, the regulator was informed that during March hydropower generation contributed about 24 per cent -- down from 27 per cent in the previous month -- to the total supply. Electricity generated with furnace oil declined to 43 per cent from 44 per cent.

Power generated through natural gas in April, however, increased to 27 per cent from 24 per cent in March. Contribution of nuclear plants was 4.5 per cent.

Officials said the SNGPL and SSGCL had sought an increase of Rs48 and Rs43 per unit (MMBTU), respectively, in their tariff to meet their revenue requirements for the 2011-12 financial year.

But after the public hearing, Ogra concluded that SNGPL would require Rs220 billion revenue during the year to meet its expenses. Its annual income was estimated at Rs216 billion, leaving a shortfall of Rs4 billion.

Likewise, SSGCL`s revenue requirement for next year was estimated at Rs146 billion and its expected income at Rs144 billion, leaving a shortfall of Rs2 billion.

The tariff increase allowed by Ogra has been estimated to meet the revenue requirement of Rs6 billion for the two companies.

Under the law, the government is required to issue a notification within 40 days of tariff determination by Ogra.