ISLAMABAD - Big reduction in electricity tariff is on cards as the government is not only restructuring slabs structure but the per unit price of electricity is expected to be slashed by Rs.2 under monthly charges adjustment.

According to the sources on the direction of Prime Minister Nawaz Sharif a team is working on the restructuring of slabs under the chair of Prime Minister’s Adviser Sartaj Aziz. We are working to break down 300-700 units slab category, there are many suggestions under consideration including breaking the slab into two new slabs, 300-500 and 500-700, said a senior official of Ministry of Water and Power.

This breakdown would specially benefit middle class and their bills would come down, he further said. Not only government was restructuring the slabs but in terms of fuel charge adjustment big cut in tariff is on the cards. Due to reduction in fuel prices in international market we have saved up to Rs 8 billion, but the real saving is from the optimum usage of power plants, he claimed.

Explaining government efforts to minimise electricity generation cost the official said that after optimising the generation next emphasis would be on improving efficiency of Discos. The termination of Lesco chief was the first step, now you would hear some more steps soon and after that we would concentrate on cutting lines losses, another silent contributor to large bills, he vowed.

In June and afterwards public received access bills, reportedly, due to reduction in subsidy slabs on the directions of IMF.

However, Minister for Water and Power Khawaja Asif has been insisting that not subsidy withdrawl but 35 days billing cycle due to Eid holidays was actually the reason behind the access bills. Meanwhile, Nepra on Thursday allowed a decrease of 74 Paisa per unit in the tariff of K-electric consumers for the month of October 2014, under monthly fuel charges adjustment, after the reduction in fuel prices.­ K-electric submitted that due to fuel price decrease it saved 62.889 paisa per unit and under power purchase price the savings were 10.708 paisa per unit or kilowatt hour, as compare to the cost Nepra has fixed for power generation.

The fuel cost variation of K-electric own generation was Rs894.749 million, while from external generation sources the difference was Rs152.349m, hence the total variation for the month of October was Rs1047.098 million.

On the basis of above calculations the company declared that it actually saved 73.597 paisa on each unit as compare to the reference price set by the authority.

Total units sent out in October 2014 were calculated 1,422 million. The company in its petition has written that the submission is based on the original invoice of NTDC for the month of Sep-14 and the units sent out on gas and furnace oil at Bin Qasim Power Station have been worked out in the ratio of actual units generated on gas & furnace oil at Bin Qasim. The company has further clarified that the price of gas, used for the power generation, was calculated without GID Cess, as per the order of Sindh High Court.

The authority expressed concerns over Tapal and Gul Ahmed IPPs, who mentioned old costs of furnace oil in their generation record for the month of October.

From this reduction consumers would get relief of more than Rs one billion. The decrease would be reflected in the electricity bills of January. This reduction would not be applicable to consumers using less than 50 units per month as they are already billed on subsides rates.