Pakistan: Govt approves massive hike of upto Rs7.5 per unit in base power tariff


ISLAMABAD: The federal cabinet on Saturday gave approval to a massive increase in the base tariff of electricity by up to Rs7.50 per unit against the national average tariff determination of Rs4.96 by the power regulator.

The approval was given by the cabinet via circulation summary, sources told Geo News and a request has been submitted to the National Electric Power Regulatory Authority (Nepra).

Federal Secretary Energy Rashid Mahmood Langrial said that 55% of electricity consumers would not be affected by the increase.

Last week, the regulator hiked the tariff to increase revenue collection for the loss-making power distribution companies (Discos) during the current fiscal year.

The hike is set to come into force from July 1 after formal notification by the Nepra following a public hearing.

The federal government sought approval from the cabinet, adjusting different rates of increases for various consumer categories through cross-subsidy, though without affecting the overall revenue requirement.

According to a Nepra statement, the revised national average tariff for the 2023-24 fiscal year has been determined at Rs29.78 per unit kWh, which is Rs.4.96 per unit higher than the previously determined national average tariff of Rs24.82.

While the regulator cited the rupee’s devaluation, high inflation and interest rates, the addition of new capacities and overall low sales growth as reasons behind the increase, it was actually hiked to meet one of the conditions set by the International Monetary Fund (IMF) of introducing structural reforms in the energy sector.

However, the applicable tariff would be much higher after including surcharges, taxes, duties and levies, besides monthly and quarterly adjustments.

According to the letter, the retrospective price hike will take effect from July 1 and includes K-Electric among the power distribution companies (Discos).

It said lifeline consumers using up to 100kW per month and the protected segment consuming up to 200kW will be exempted from the hike. Hence, lifeline consumers using up to 50kW will continue paying Rs3.95 per unit while those using between 51-100kW will continue paying Rs7.74 per unit.

Similarly, the base tariff for protected consumers using between 1-100kW every month will remain at Rs7.74 per unit while for protected users consuming between 101-200kW, the rate will remain at Rs10.06 per unit.

However, for unprotected residential consumers using up to 100kW per month, the base tariff has been hiked by Rs3 per unit, reaching Rs16.48, while those consuming between 101-200kW will be paying Rs22.95 per unit after an increase of Rs4.

Similarly, for those consuming between 201-300kW, a price hike of Rs5 per unit will leave them paying Rs27.14 for every unit consumed.

An increase of Rs6.50 per unit for consumers in the 301-400kW category will result in them paying Rs32.30 per unit.

For consumers using between 401-500kW, the price has been increased by Rs7.5 per unit, taking the new rate to Rs35.24, while an equivalent hike for those consuming between 501-600kW will take the rate to Rs36.66 per unit.

Similarly, for those consuming between 601-700kW, the base tariff has been increased by Rs7.50, reaching Rs37.8 per unit while an equal hike for consumers using more than 700kW has taken the new tariff to Rs42.72 per unit.

It may be mentioned that after including sales tax at the rate of 18 per cent, the maximum power tariff — for those using more than 700kW — will reach Rs50.41/kWh.

Meanwhile, for commercial consumers lying in the A-2 category and having a “peak load requirement of less than 5kW”, the base power tariff has been hiked by Rs7.50 per unit, taking it to Rs37.75.

An equivalent tariff hike for “regular” consumers having a “peak load requirement exceeding 5kW” will have them paying Rs39.43 per unit.

For commercial consumers lying in the General Services A-3 category, the base power tariff has been hiked by Rs7.50 per unit as well, taking it to Rs37.31.

After approving the Nepra’s proposal, the cabinet had yesterday filed a motion to “reconsider and issue” the new uniform tariffs for the above-mentioned Discos and K-Electric.

Subsequently, the Nepra announced it will hold a hearing on July 24 (Monday) to finalise the decision.__Pakistan Today