(MENAFN - Jordan Times) The majority of Jordanian households will be unaffected by a rise in electricity rates that marked the second in a week, officials say, refusing to rule out the possibility of further increases in the future.
According to the Electricity Regulatory Commission (ERC), a Cabinet decision on Saturday to raise electricity rates on households as high as 35 per cent - a move that came one week after pledges not to raise rates on citizens - was designed to target the largest consumers.
"We developed a just formula that would place the burden of costs on the largest consumers, and the Cabinet acted accordingly," said ERC Commissioner Ahmed Hiyasat.
The amended tariff, which will go into force on Tuesday, exempts consumers that consume less than 600 kilowatt-hours (kWh) per month, a segment officials claim represent 96 per cent of households.
Approximately 2 per cent of households fall within the 601-750kWh bracket and will face a 6 per cent rise under the revised tariff, translating to a JD4 increase in their monthly bills.
Some 2 per cent of households consume between 751-1,000kWh, according to the commission, and will face a 12 per cent, or JD6 rise, while those who consume over 1,000kWh, also 2 per cent of the population, will be facing increases of up to 35 per cent.
Hiyasat pointed out that even with the increase, consumers who fall within 601-750 and 751-1,000kWh brackets will be paying 141 and 168 fils per kWh respectively, less than the National Electric Power Company's (NEPCO) generation cost of 189 fils per kWh.
The new rates follow a similar pricing model introduced in a proposed tariff that was withdrawn by the government earlier this year following challenges to officials' claims that the formula would exempt most households.
Saturday's increase comes one week after the government imposed a new electricity tariff, raising rates as high as 150 per cent across several sectors but left residential and commercial sectors untouched.
Acknowledging that "all sectors" are now carrying part of the burden of rising energy costs after Saturday's increase, Hiyasat refused to rule out future increases.
"The decision to raise electricity rates is in the hands of this government and future governments, and they will have to act accordingly," he said.
This new rates are expected to save the government an additional JD74 million per year, a number combined with last week's increase will allow authorities to shave off some JD198 million of NEPCO's JD1.5 billion budget deficit annually.
However, a recent rise in heavy oil prices are likely to reduce savings to some JD120 million per year, according to Hiyasat, extending the forecast period to close NEPCO's deficit to 11 years.
The raise in electricity rates comes amid ongoing disruptions in the Kingdom's Egyptian gas supplies, which according to officials have yet to surpass 10 per cent of the 300 million cubic feet stipulated in a 14-year gas agreement, a deficit that has pushed the national energy bill to JD4 billion.
The new rates come as part of a planned package of "difficult" economic decisions and austerity measures that the government claims aims to address a JD2.9 billion deficit that Prime Minister Fayez Tarawneh described as "worse than previously believed".