ISLAMABAD: The government on Tuesday approved fixing the electricity price at Rs 26.07 per unit for additional consumption of up to 25% for a period of 3 months under the winter electricity package and has also set strict conditions for consumers to benefit from this facility.
The ECC has also approved the transfer of emergency relief funds of Rs 3.14 billion to the NDMA. These funds will be used for rescue and relief operations of the NDMA.
According to details, the Economic Coordination Committee (ECC) of the Cabinet has approved the winter package for industrial, domestic consumers using more than 200 units, commercial and general services consumers.
The winter package will reduce the demand for gas along with the higher utilization of the system’s generation capacity. The Ministry of Power said that a tariff of Rs 26.07 per unit will be collected from all eligible consumers on the relevant additional consumption.
This package was approved for only three months, December, January and February. The IMF had rejected Pakistan’s request for a six-month extension (December to May) to the package, and no subsidy is being given for this package.
This shows that the cost of electricity generation is Rs 26.07 per unit and the government charges up to Rs 52 per unit after deducting taxes.
Interestingly, this package for excess electricity consumption will be applicable only up to 25 percent of the units consumed in excess of the reference benchmark. If the excess consumption exceeds 25 percent, the consumer availing the Rs 26 per unit package will then have to pay the normal price up to Rs 52 per unit.
According to the ECC, the winter package will not be applicable to net metering or wheeling consumers or consumers with faulty electricity meters for the applicable month.
Strict benchmark conditions have also been set for customers with time-of-use meters where their consumption will be calculated based on peak and off-peak usage conditions.
The winter package will also be applicable to K-Electric customers. Negative fuel cost adjustment will not be applicable on excess consumption but will be charged to the customers if the fuel price exceeds the reference price.
The government has assumed an exchange rate of Rs. 300 per dollar to determine the fuel price. This has further reduced the desired benefits for the customers.
If the Petroleum Division fails to provide an additional 50 mmcfd of imported LNG per month, the customers will be charged a higher fuel price.
The government admitted that due to the increase in electricity prices, electricity demand fell by 8 percent in the winter months of the last fiscal year. The demand decline was 6 percent in the previous year.
Implementing this measure to increase electricity demand in winter will require the allocation of additional RLNG to the power sector.
The Petroleum Division has promised to provide additional RLNG, but if the Petroleum Division does not provide additional imported gas, the consumer price on the additional consumption will increase by more than Rs 26.07 per unit.
