ISLAMABAD  -     Minister for Power Division Omar Ayub Saturday said there would be no increase in tariff for the domestic electricity consumers, using up to 300 units per month.

“This segment accounts for 75 percent of the total consumers,” he said while speaking here at a press conference.

The minister said for the consumers using above 300 units there would be a 50 percent rise, which was of the increase recommended by the National Electric Power Regulatory Authority (NEPRA). “We have reduced it to half of that as against NEPRA’s proposals because we have tried that these consumers are also not overburdened.”

He said the tariff would be valid for a period of 15 months, and after that it would be out of the system and there would be only regular fuel adjustments for the consumers.

He said the Pakistan Tehreek-e-Insaf government had given a 54 percent subsidy to the tube-well consumers. “We are giving protection to the tube-well consumers and those related to the agricultural sector,” he added.

Omay Ayub said the previous government of Pakistan Muslim League-Nawaz did not enhance the power tariff despite NEPRA’s determination.

He said there would be no increase in tariff for the small commercial consumers, who run shops and general stores in streets and towns. That segment accounted for 95 percent of the total commercial consumers, he added.

The same facilities, he said, had also been upheld for the export-oriented industries. The initiative would help increase exports and generate business activities in the country. “All this is being done according to the directions of Prime Minister Imran Khan. Consultations were made with the Ministry of Finance and other departments concerned,” he added.

The minister said currently there was zero load-shedding on around 80 percent feeders, while teams were working on the remaining 20 percent feeders to end loadshedding. He said teams had also been constituted to check overbilling.

Omar Ayub said as per instructions of the prime minister, directives had been issued to provide three hours extra electricity to all feeders of Balochistan.

The government, he said, had decided to interconnect the isolated areas of Gwadar and Makran with the national grid system. The project costing Rs 18 billion would be completed by 2021. Currently the area was getting 100MW electricity from Iran, he added.

He said there were around 29,000 regular legal tube-wells in Balochistan, while around 12,000 tube-wells were illegal. The illegal tube-wells, he said, would be disconnected within three months.

The government, he added, was also trying to convert the tube-wells in Balochistan on solar energy as negotiations were in progress to ink a $4 billion agreement with Saudi Arabia for that purpose. 

The minister said the Oil and Gas Regulatory Authority (OGRA) had determined the total revenue requirements for FY 2019-20 as Rs 541 billion, which included Rs 54 billion on account of prior years circular debt. Based thereon, OGRA had determined the average cost of supply of indigenous gas as Rs 738/MMBTU, he added.

The present tariff, he said, could generate a total revenue of Rs 397 billion during the year, resulting in a revenue shortfall of Rs 144 billion. Therefore, revisions in gas sale prices were inevitable, he added.

He said even with the increases proposed, 95% of the domestic consumers were being subsidized for a total of Rs 104 billion.  Around 45% of the domestic consumers, who were currently paying only Rs 121/MMBTU, would not face any price increase and their tariff was fixed at only 16% of the cost of supply, he added.

He said the government wanted to gradually bring the gas tariff closer to the cost of supply for most consumers while protecting the low-end consumers. “This is necessary for the long-term sustainability of gas sector. The slab structure has been revised to provide one previous benefit to the domestic consumers,” he added.

Omar Ayub said around 95% of the domestic consumers were being cross- subsidized by the high-end domestic consumers and other sectors. The major reason of the high bills during winter was inefficient and continuous use of gas in geysers for water heating and heaters for space heating, he said.