Another round of Power Tariff hikes likely.

Last year you must have seen your power bills going up. In fact, 2012 was the first year when every state in India hiked electricity prices. But you would be wrong if you thought that was it. Prepare yourself for another round of tariff hikes.

Let us explain why. Customs duty on imported steamed coal has been increased. There has been an increase in railway freight as well. In addition, price pooling of coal would make domestic coal more expensive. It must be noted that under this new mechanism, power producers would have to pay a weighted average prices of domestic and imported coal. All these factors have led to a further increase in power generation costs. And this increased burden would eventually have to be borne by consumers.

It is believed that states where power utilities are bearing huge losses will see the steepest hike in power prices. One of the conditions imposed by the Centre in the financial restructuring package announced last year was to announce tariff hikes every April. As such, consumers in states such as Rajasthan, Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Punjab, Haryana and Tamil Nadu are now expected to witness stiff tariff hikes.