Electricity costs won't go up until the govt stops power theft and leakages

Finance Minister Asad Umar said the public won't suffer because the govt can't improve the distribution system
Oct 22, 2018
Electricity prices won't be going up just yet. Finance Minister Asad Umar deferred the increase again and has told authorities to stop power theft and leakages in the transmission and distribution system. If we can’t improve the power distribution system, we will not put the burden on the public, Umar told the Economic Coordination Committee on Monday. The ECC is a top government body responsible for making key policy decisions. The National Electric Power Regulator Authority has suggested raising tariffs for power distribution companies by Rs3.82 per unit. The government is considering an increase in prices because it doesn’t have enough money to continue paying subsidies on electricity losses. Inter-corporate debt, loans and liabilities in the power sector are at an all-time high of Rs1.15 trillion. Related: ‘Smart’ electricity meters could be coming soon However, the ECC has deferred its decision about a rate hike at all of its meetings so far. The next meeting is scheduled for Wednesday but the agenda will be about transmission and distribution losses, not the price hike. Transmission and distribution losses are one of the major problems facing the power sector. Since all distribution companies are owned by the government, their losses have to be subsidised by the taxpayers. In financial year 2017, distribution companies’ line losses were 18% of the electricity they purchased from power producers — three out of 10 distribution companies have line losses over 30%. Related: Government will not be increasing electricity prices as yet It is necessary to improve the distribution system, Umar said. Unless the system of receivables improves, the government will not increase the price, he added. The finance minister has instructed these companies to control power theft and leakages in their distribution systems. Last month, the government also raised gas prices by 10% for consumption of up to 50 units and by 143% for consumption exceeding 400 units because the Sui Southern Gas Company and Sui Northern Gas Pipeline Limited alone make a loss of Rs150 billion per year.




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