ISLAMABAD: Out of the Rs7.41 electricity tariff cut announced by Prime Minister Shehbaz Sharif, official sources have said the portion of Rs3.93 per unit will be on a permanent basis but Rs3.50 would not be sustainable on a long-term basis, it was reported on Saturday.
According to a senior Power Division official, the government has factually reduced the power tariff by Rs5.96 per unit which after being taxed with 18% GST becomes an average reduction of Rs7.41 per unit for the end consumers.
The Rs5.96 per unit relief includes the reduction of Rs1.90 per unit under Quarterly Tariff Adjustment but after being taxed, it turns Rs2.37 per unit, Rs1.70 per unit reduction in tariff because of Rs10 per litre petroleum levy which turns Rs2.12 per unit after adding the GST.
The Rs5.96 per unit relief also includes a relief of Rs0.90 under the fuel charge adjustment (FCA) which becomes Rs1.13 per unit after GST tax.
The relief also includes a reduction of Rs1.45 per unit which is Rs181 per unit after GST that has been harnessed as a result of talks of the task force on power with IPPs, and government power plants.
The Rs3.93 sustainable relief has come from two heads which include Rs1.81 per unit relief as a result of terminating power purchase agreements of five IPPs with an impact of Re0.64per unit, converting PPAs of 14 IPPs into take and pay mode and termination of contract of one IPP with impact of Re0.65 per unit, delinking of eight bagasse based power plants with an impact of Re0.10 per unit and revised contracts of six government power plants (GPPs) with an impact of Re0.41 per unit.
However, under the second head, Rs2.12 per unit relief on a permanent basis has emanated from savings to be collected on account of the latest Rs10 Petroleum Levy. The government has submitted the petition to the National Electric Power Regulatory Authority (Nepra) seeking Rs1.81 per unit relief as a result of task force negotiations with IPPs to be determined by the Nepra.
Also, the Rs3.50 per unit reduction may not be sustainable on medium-to-long term basis, as it includes Rs2.37 per unit relief as a result of reduction in quarterly tariff adjustment (QTA) and Rs1.13 per unit relief on account of savings in fuel charges adjustment. The relief of Rs3.50 will be extended for three months (April, May and June).
