The government believes that the decision to subsidise the FEA rates of about 22,000 bill payers who use 75 units of electricity or less is fair as these low end consumers need to be assisted.
The major change for assistance for household lifeline customers is that previously FEA used to subsidise the rates of all customers who used 130 units of electricity or less.
These lifeline customers used to pay 17.2 cents are unit while 17 cents was paid by the FEA.
This resulted in FEA providing the service at a loss.
Now FEA will not provide the subsidy as the government will pay FEA the market rate for all customers who use 75 units or less.
This would mean that the lifeline bill payers will still pay 17.2 cents a unit but the remaining 17 cents will be paid by the government.
The change is that those who use more than 75 units will now pay rates of 34 cents a unit.
Commerce Minister, Aiyaz Sayed-Khaiyum said the lifeline in terms of subsidising electricity rates now set is still higher than the international benchmark.
Sayed-Khaiyum said FEA currently has a total of 400 million dollars in government guaranteed loans and a restructure process is currently underway. He said FEA needs to be paid at market rates and cannot continue to supply electricity at a loss.
On the commercial rate, for those below 15 thousand kilowatts per month and currently paying a rate of 37 cents, will see an increase to 39 cents on the 1st of November and 41 cents per unit from the 1st of April.
For those using more than 15 thousand kilowatts per month, they will pay 41 cents per unit in November and 43 cents from the 1st of April. For the maximum demand side, the increase ranges from 6.9 cents to 12.1 cents per unit.
Story by: Vijay Narayan
