Minister announces Rs1.95 increase in power tariff, blames PML-N for leaving 'landmines' for PTI govt.

Federal Minister for Energy Omar Ayub Khan on Thursday announced a Rs1.95 per unit increase in electricity rates, blaming the "landmines" left for the PTI government by the previous administration for the power sector's perennial issues.

Addressing a press conference in Islamabad alongside Special Assistant to the Prime Minister (SAPM) on Power Tabish Gauhar and federal Minister for Planning, Development and Special Initiatives Asad Umar, Ayub said the rise in tariff was still "much less than the increase which should be done due to the [PML-N government's] failed policies".

He said the new rates would be applicable once the National Electric Power Regulatory Authority (Nepra) issued a notification.

Attempting to address incoming criticism of the price hike, the minister said the government had acted as a "shield" during the Covid-19 pandemic to avoid a price hike but that it didn't have a "magic wand".

He highlighted that the government had given a subsidy of Rs473 billion in the last year to the power sector alone. This had been possible because of the "planning the government did which became a shield".

Khan said the previous government had left "landmines" for the PTI government in the form of badly drawn up agreements with independent power producers (IPPs) - which he said used wrong fuel mixes, forcing the country to rely on imported fuels for power generation - and the issue of capacity or compulsory payments.

Explaining the issue of capacity payments, the minister said due to the bad deals of the previous government, power producers had to be paid whether the electricity produced was used or not. He said the PTI government had agreed that it could not place the full burden of these capacity payments on the people.

Monopolies in distribution companies to end in 2-3 years: SAPM

SAPM Gauhar, meanwhile, said that he expected monopolies in power distribution companies to be ended in two to three years thus giving consumers more choice, along with various other positive developments in the power sector which will serve to benefit consumers.

"Consumers have no choice [due to] the monopolies in [electricity] distribution companies; in the next two to three years these monopolies will be finished and the consumers will get more choice," said Gauhar.

He said people living in cities were forced to rely on their area's sole distributor with no other options available to them. He added that the government was now looking at a system of multiple...