10 Percentage Hike In Power Tariff Proposed – Will Stir Resistance
The removal of subsidy on power tariffs may prove to be politically difficult to implement for the government of the day as the people as the consumers were already allergic to the quality of services of the utility companies as well as exorbitant electricity prices impairing economics of the small and medium business especially in the face of depressive economic activity and slowdown. In this backdrop, the planned power tariff hike of 10% in October remains the second major milestone for a sustainable resolution of inter-corporate debt. It may be mentioned that the government’s latest decision to hike petroleum product prices by 7-8% in the latest monthly price review has drawn severe criticism from all corners of the country and as well as the media and opposition alike.
However while the trade and industry and general consumers were making hue and cry over recent hike in petroleum prices, the Oil Marketing Companies, particularly Pakistan State Oil (PSO), stand to benefit from strong inventory gains and firm margins.
The latest revision in prices reflects the impact of both international prices (up 10% Mom) and weakening of the Pak Rupee (3%). While the government has fixed HSD margins at Rs1.35/litre or US$2.6/bbl (40% of total volume), margins on furnace oil (deregulated) and gasoline (4% of ex-refinery prices) should increase by 2% and 10% respectively.
