PM Shehbaz says increase in the power tariff would not affect those using up to 200 units per month

LAHORE, July 24 (SABAH): Prime Minister Mian Muhammad Shehbaz Sharif said on Monday that the increase in the power tariff would not affect those using up to 200 units per month.

PM Shehbaz Sharif made the remarks while addressing a ceremony in Lahore during which Pakistan LNG Limited and Azeri company Socar signed a framework agreement for liquefied natural gas (LNG).

Last week, the federal cabinet had approved the power regulator’s request to increase the national average tariff, which will see some residential consumers paying up to Rs7.50 more per unit.

The cabinet had approved the hike through a summary and the decision was conveyed to the National Electric Power Regula­tory Authority (NEPRA) on Saturday. NEPRA had set a public hearing for Monday to fulfill the formalities before implementing the hike, which will retrospectively take effect from July 1 and will apply to all power distribution companies (DISCOS) and the Karachi-based private utility K-Electric.

Earlier this month, the power regulator raised the national average tariff by around Rs5 per unit (equal to one kilowatt-hour, or kWh) to ensure Rs3.28 trillion in funds to the loss-making power distribution companies during the current fiscal year.

Addressing the ceremony on Monday, PM Shehbaz Sharif said that there had been some debate over the decision to raise the power tariff, noting that this was one of the conditions of the agreement with the International Monetary Fund (IMF).

“We had to increase it because of IMF agreement but I strictly said that I will not let the increase in the prices burden the poor,” he said, adding that this was also discussed with several ministries.

“The increase will not impact 63 percent of domestic consumers which come under lifeline consumers and protected segments,” he said. “There has been no increase [in the power tariff] for those using up to 200 units, which is 63pc of domestic consumers.”

Shehbaz Sharif also said that a “partial subsidy” was being given to those using up to 300 units per month which comprised 31pc of total domestic consumers.

Talking about the LNG deal, the premier said that the two “brotherly countries” had just signed an agreement for the procurement of LNG from Socar.

“This agreement has a life of one year, which will be extendable to one more year,” he said. He said that under the agreement, Socar would offer Pakistan an LNG cargo each month. He said that Pakistan would be able to decide whether or not it will buy the cargo.

“If we buy it then well and good but if we don’t then there won’t be any burden or penalty on us,” he said, adding that Pakistan would have “freedom” in buying the cargo.

The prime minister further said that he was grateful to his “very dear brother”, Azerbaijan President Ilham Aliyev. He noted that he had visited Aliyev a few weeks ago and was given an “exceptionally warm welcome” by the president, his government and his team.

PM Shehbaz said that the two sides had “extremely productive and fruitful discussions” on how to promote economic relations between the two countries.

“Immediately, on my return to Pakistan, we have given approval to [an] Azeri airline to land at Islamabad, Lahore and Karachi. This is a big step to promote tourism, investment and exchange of delegations between the two countries.”

Under the framework agreement, Socar has offered LNG supply to Pakistan in the form of one cargo per month on flexible terms and with credit lines for 30 days after delivery of the cargo.

Prime Minister said the life of this agreement is one year which is extendable to one more year. He said under the agreement, Azerbaijan will offer one Cargo of LNG each month and it will be up to Pakistan to either accept the cargo or not. He said there will be no financial penalty if Pakistan does not accept the cargo.

The Prime Minister termed the agreement as a major milestone in the fraternal relations between Pakistan and Azerbaijan. He especially thanked the President of Azerbaijan for playing a pivotal role in this agreement.

Alluding to his recent productive and fruitful discussions with the President of Azerbaijan, the Prime Minister said we have given approval to Azeri airline to land in Islamabad, Lahore and Karachi.  This is a big step forward to promote tourism and investment and exchange of delegations between the two countries.

Shehbaz Sharif an Azeri delegation of horticulture experts is also arriving in Pakistan today on his invitation. He said we want to learn from their expertise to make the landscape of Karachi, Peshawar, Quetta and Lahore as beautiful as that of Baku.

In his remarks on the occasion, the Ambassador of Azerbaijan said that both the countries are deepening their cooperation in diverse fields including energy, defence, IT and transport. He said the two sides are also negotiating a preferential trade agreement, expressing the confidence that they will be successful in this regard as well.