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Electricity tariff hike likely this year

(Agencies)
Updated: 2008-09-12 10:12

China is likely to raise tariffs on electricity sold by power grids, with receding inflation giving regulators more flexibility to do so, the official China Securities Journal reported.

Officials from the State Electricity Regulatory Commission said at a news conference yesterday that the commission has also submitted a report to the State Council, or cabinet, proposing measures for price reforms and improving the price formation mechanism, according to the report.

The measures include allowing power prices to be determined by the market and charging intensive users higher rates.

China is not expected to hike on-grid tariffs - the prices at which independent power providers sell to grid companies - anytime soon after two hikes recently, the officials said.

China raised on-grid power tariffs by up to 0.035 yuan per kilowatt hour (kWh) on July 1 and by an average 0.02 yuan per kWh on Aug 20, forcing grid operators to absorb higher costs.

China's consumer price index growth fell to 4.9 percent in August from 6.3 percent in July. The indicator was at 7.9 percent in the first half of the year.