ISLAMABAD  -  The government has called a meeting of the Economic Coordination Committee (ECC) today (Monday), to take a decision on the electricity tariff increase it had deferred on Oct 16.

Interestingly, the ECC had already postponed hike in power tariff in its earlier meeting held on October 2 owning to by-polls.

Under the chairmanship of Finance Minister Asad Umar, the ECC is also expected to take up issuance of security clearance certificate for transfer of majority shares of K-Electric to Shanghai Electric of China as well as review a report on tax benefits enjoyed by the sugar industry.

The ECC has been struggling to decide on the electricity tariff increase worked out by the National Electric Power Regulatory Authority (Nepra) under policy guidelines from the previous government, envisaging higher cost of inefficiencies and theft charged to paying consumers. The International Monetary Fund (IMF) has also encouraged PTI to ensure full cost recovery of electricity being supplied to consumers.

Umar, in previous meetings of the committee, had made clear to authorities that he did not support non-recoveries and defaults to burden honest consumers. He has also shown reluctance to add substantial burden on lower-middle-class domestic and commercial consumers and announced reducing power costs to five export-oriented sectors.

As things stand, Nepra has worked out a Rs3.75 per unit increase in average power tariff and had suggested that after accounting for the existing subsidy allocation in the budget, the government has to increase average power tariff by about Rs2 per unit. Based on observations of the finance minister, sources said the Power Division had suggested about Rs2.20 per unit or almost 35-39 per cent increase for domestic consumers with monthly consumption of 300-700 units and about 26pc average increase for lower slabs of below 300 units. The Power Division proposed no increase for lifeline consumers –– less than 50 unit per month consumption, 26pc (87paisa per unit) for up to 100 units and Rs1.30 per unit hike for up to 300 units.

The government will collect additional Rs400 billion after hike in power tariff which is being carried out for 2016-17 and 2017-18.

The finance ministry in its statement said that the consideration of the Ministry of Power’s proposal for a notification of the National Electric Power Regulatory Authority’s (Nepra) determined tariff was delayed until finalisation of a comprehensive plan for the improvement of service delivery.