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10 pc increase in power tariff likely

KARACHI: With the recent 15 percent hike in the furnace oil prices, Wapda and KESC are likely to announce 10 percent increase in electricity bills.

"The recent 15 percent increase in furnace oil prices has pushed both Wapda and KESC in a tight corner and there seems no way out except an increase in power tariff," an analysts on power sector said.

Sources confirmed that Wapda had already approached the National Electric Power Regulator Authority (Nepra) and the federal governnment for 10 percent increase in the tariff.

With around 10 percent of Wapda's own generation coupled with 78 percent of the private power running on furnace oil, Wapda's fuel bill is expected to rise by Rs. 4.3 billion annually.

Analysts believed that for the remaining four months of the current fiscal, Wapda would be losing Rs. 1.5 billion due to the furnace oil price increase.

IPPs come out unhurt by the rise in furnace oil prices as under their power purchase agreement with Wapda, they enjoy the comfort of passing on the cost of fuel to Wapda.

"The government has to come to the immediate rescue of Wapda by increasing power tariff or provide adequate cover in terms of subsidy to Wapda. Unless this relief is forthcoming, Wapda's recently improved financial health shall take a severe blow and may again slip into abyss," an analyst observed.

On the flip side, with more than 1,500 mw surplus electricity available, any increse in power tariff especially after the recent 15 percent increase due to imposition of GST will surely affect the already depressed demand for electricity. Fortuna