ECC likely to green-light electricity tariff hike today

ISLAMABAD: The Economic Coordination Committee (ECC) will meet today with Finance Minister, Asad Umar, in the chair to mull over summary about electricity tariff increase, as it has been deferred thrice before.

The National Electric Power Regulatory (NEPRA) had proposed an increase of Rs3.82 per unit, however, sources say that electricity tariff will be hiked up to Rs2.30 per unit.

During last meeting of the ECC held on October 22, Mr Umar had directed authorities concerned to submit a detailed plan for improvements in the power sector particularly measures to increase recoveries and reduction of the line losses.

The meeting also discussed the performance of different sectors of the economy including energy. Apart from the electricity tariff, the issue of subsidy on agricultural tube wells in Balochistan was also on the agenda. The committee decided to consult Chief Minister Balochistan before a decision on the matter.

During meeting, the Auditor General shared a report on audit findings pertaining to financial and operational issues in the four power distribution companies, HESCO, PESCO, QESCO and SEPCO, in the years 2016-18.

The report highlighted significant areas of the distribution system responsible for the line and commercial losses. The finance minister directed Ministry of Power to take immediate measures for solving problems raised in the report

It may be recalled that, power tariff hike is prime condition of the International Monetary Fund (IMF), in order to receive new bailout package requested by Asad Umar during his recent visit to Bali to improve the financial situation in the country.

The government has argued that the increase is inevitable due to additional increase of Rs35 billion in the circular debt which has surged to over Rs1.2 trillion. The power sector is also facing a liquidity crunch for not increasing the tariff leading the banking sector to stop lending due to the circular debt.