ISLAMABAD  -   The PTI-led coalition government yesterday once again deferred a decision on increasing power tariff.

The Economic Coordination Committee (ECC) of the cabinet, which met under the chair of Finance Minister Asad Umar, considered increasing power tariff. The ECC considered the two items on the agenda — a subsidy for agricultural tubewell consumers in Balochistan and tariff rationalisation for the power sector.

The top economic decision-making body of the country once again failed to enhance the power tariff, which the government had recently termed inevitable to control the circular debt. The ECC had taken up the power tariff issue several times over the last two months. However, the government is reluctant to take anti-people decision of increasing electricity prices as it had already announced massive hike in gas prices upto 143 percent and announced a mini-budget.

The government has decided to call the next ECC meeting on Wednesday to consider the difficult decision. Sources said the finance minister will discuss the issue with Prime Minister Imran Khan before the next ECC meeting. The government last week had announced that an increase in power tariff had become unavoidable, as circular debt was increasing Rs34 to Rs36 billion every week by not enhancing the electricity prices. The circular debt had already swelled to about Rs1.2 trillion. The number included the fresh flow of Rs615 billion and old stock of Rs582 billion parked in the special purpose vehicle — Power Holding Company Ltd. Earlier, the Power Division had recommended the ECC to increase the power tariff to reduce the circular debt of the country.

The proposed increase did not envisage any increase in tariff for domestic consumers using upto 50 units, a raise of Rs 0.87 per unit for consumers (26 percent) upto 100 units, a raise of Rs 1.22 per unit for consumers using up to 200 units, a raise of Rs 2.04 per unit for consumers up to 300 units and above.

The government would have to increase the power tariff before the arrival of International Monetary Fund (IMF)’s team to Pakistan. The IMF team would visit Pakistan from November 7 to finalise the conditions of the fresh bailout package for Pakistan. The increase in electricity rates is a prior action for the Fund’s programme. Last week, Federal Minister for Information and Broadcasting Chaudhry Fawad Hussain had hinted at increasing the power tariff. He informed the media that current average per unit power cost was Rs15.53 and the government was providing it to consumers at the rate of Rs11.71 per unit, causing a loss of Rs2.63 per unit to the national exchequer. The government was facing deficit of Rs1.2 billion on daily basis in winter seasons while the deficit further enhanced to Rs1.8 billion in summer. As a result of these losses, the minister said that circular debt was mounting by Rs34 to Rs36 billion every month.

The ECC directed the concerned officials to submit a detailed plan for improvements in the power sector, especially measures to increase recoveries and reduction of losses, before the proposed tariff rationalisation plan could be approved.

The ECC would meet again on Wednesday, to consider the above-mentioned plan and tariff rationalisation proposals.

The auditor general shared with the ECC a report on audit findings pertaining to financial and operational issues in the four power distribution companies i.e. HESCO, PESCO, QESCO and SEPCO in the years 2016-17 and 2017-18. The report highlighted significant areas of the distribution system responsible for line and commercial losses. The chair directed Ministry of Power to take remedial measures on the issues raised in the report.

The ECC also discussed another proposal of the Power Division relating to payment of subsidy on agricultural tubewells in Balochistan. The committee decided to consult the Balochistan chief minister before taking a decision in the matter.

The ECC was presented a summary by the Power Division to report that about Rs200b of the Quetta Electric Supply Company (Qesco) was outstanding against consumers — including about Rs189b of agricultural tubewells. Qesco supplied about 75pc of the electricity to tubewells estimated at 32,000 in number.