Cost Reflective Tariffs not to affect domestic consumers

By V L Srinivasan

Muscat, March 3: The much talked Cost Reflective Tariffs (CRT), proposed to be introduced later this year, will not affect domestic consumers, a senior official of the Authority for Electricity Regulation (AER) confirmed.

AER is also finalising proposals for a special tariff for consumers with special needs to provide electricity at cheaper rates compared to other consumers. For this, AER has sought data from the Ministry of Social Development.

Once the proposals are ready, they will be submitted to the Council of Ministers for its approval. “The Authority is developing the CRT for commercial and industrial consumers of electricity in accordance with its statutory duties and they will not have any implications for residential consumers,” AER's deputy executive director Qais Saud al Zakwani told Muscat Daily.

“The proposals are aimed at protecting the consumers' interests and not harm them.” He said that the CRT will reduce future costs and limit increases in electricity subsidies that will help safeguard the provision of electricity supply to all consumers in the sultanate in future.

According to AER's public consultation paper on CRT, the total cost of supplying power to consumers was RO243mn in 2008 which included a government subsidy of RO63mn. The subsidy figure for 2009 is estimated to be over RO110mn.

The average consumption of industrial and commercial consumers increased by 37 per cent and 25 per cent, respectively between 2006 and 2008 while average electricity consumption by residential users increased by seven per cent and that of government establishments fell by just over one per cent.

Commercial and industrial consumers accounted for around 24 per cent of all electricity supplied in 2006, and 27.5 per cent of total supply in 2008. Over the same period domestic consumers and government offices recorded declining shares of total electricity supply.