Electricity tariffs to go up according to schedule in 2015 — minister

AMMAN — Electricity tariffs will increase by up to 15 per cent starting in January as part of a plan to gradually end subsidies and reduce the National Electric Power Company’s (NEPCO) losses, the government said Wednesday.

"The new electricity tariff will go into effect as previously scheduled. We are committed to this increase, which will range from 5-15 per cent depending on consumption and sectors," Minister of Energy and Mineral Resources Mohammad Hamed told The Jordan Times. 

The planned increase in electricity prices recently prompted industrialists and representatives of several businesses to urge the government to rescind the decision or lower the percentage of the increase.

“We will not reconsider the percentages of increase as this is in line with a five-year plan that entails putting an end to the losses of NEPCO and reaching the cost recovery by the end of 2017,” said the minister.

NEPCO’s losses reached JD1.2 billion at the end of 2014, maintaining the same level of losses at the end of 2013, he added.

The losses are blamed on the disruption to the relatively cheap Egyptian gas supplies due to dozens of terrorist attacks on the pipeline, forcing NEPCO to rely on heavy oil to generate electricity. 

The lifting of the subsidy is one of the requirements set by the International Monetary Fund, which supplied the country with a nearly $2 billion loan to address a widening budget deficit. 

Households that consume 600 kilowatt-hours (kWh) per month and less, who represent the majority of household subscriptions, will not witness any increase in their electricity tariff until the end of 2017, when the government will decide which segments of consumers will benefit from the subsidy, Hamed said.

In 2013, the government increased prices of electricity on households and industries with monthly consumptions of more than 600 and 10,000kWh respectively.

Electricity tariffs for households whose monthly consumption is 601kWh increased from JD0.141 to JD0.152 per kWh and will keep rising until they gradually reach JD0.188 by 2017.

Under the pricing mechanisms, the 25 per cent discount to security bodies, civil societies and municipalities was cancelled as well as the 75 per cent discount to workers at electricity companies.   

NEPCO currently sells electricity to consumers at an average rate of 84 fils per kWh — half the 168 fils per kWh generation costs.

The government currently subsidises the utility for households that consume 600kWh per month and less at a total cost of JD500 million, according to the Ministry of Energy and Mineral Resources.