Govt hikes electricity base prices by Rs7.91/unit to win IMF’s bailout

By Staff Reporter

ISLAMABAD: Electricity tariffs across Pakistan are expected to rise by Rs7.91 per unit in three phases to win an IMF bailout program, a regulator said on Friday.

The National Electric Power Regulatory Authority (Nepra) said it has “approved the request of the federal government for an increase in uniform national tariff and its application in three phases”.

“As per the request, the consumer-end tariff will be increased in three phases i.e. July, August-September and October onward,” Nepra announcement said. “No increase has been proposed for lifeline (up to 100 units) and protected category of consumers (101-200 units per month).”

An average tariff increase would become effective at the rate of Rs3.50 per unit during the current month, followed by another Rs3.50 per unit in August-September billing and the remaining 91 paise per unit in October. The rates would be equally applied across the country, including K-Electric.

Nepra had already determined different consumer-end for each power distribution company (ex-Wapda Discos) on June 2 for this fiscal year under which “national average tariff is now Rs24.82 per kWh, higher by Rs7.91per kWh than the earlier determined national average tariff of Rs16.91/kWh”. Based on this determination, the government requested approval of a uniform consumer-end tariff after incorporating subsidies and surcharges for all the ex-Wapda Discos and K-Electric.

The tariff for certain high-consumption residential consumers has been increased by Rs11 per unit to cover the additional burden of consumers with lower consumption. The approved rate under the ‘tariff rebasing 2022-23” for consumers with a monthly consumption slab of 101-200 units and above is significantly higher than Rs7.91 per unit increase in the uniform national average.

Besides the massive cross-subsidisation among various consumer slabs, the government would still be providing Rs234bn subsidy, Rs220bn for distribution companies of ex-Wapda and Rs14bn for K-Electric finance the tariff rebasing cost of poor consumers.

The tariff increase would generate additional revenue of Rs893 billion in 2022-23 to meet the annual revenue requirement of about Rs2.52 trillion to power companies, excluding KE besides providing a general sales tax of more than Rs425bn to the government.