Power tariff goes up by Rs1.65 per unit

ISLAMABAD – The government on Monday increased the electricity tariff, which it had put on hold in April, by Rs1.65 per unit to ensure continuous foreign inflows from lending agencies, particularly the International Monetary Fund (IMF) with which it started talks for the revival of the stalled $6 billion Extend Fund Facility (EFF).

According to the notification, National Electric Power Regulatory Authority (Nepra) has increased the price of electricity for a year by Rs1.65, after which the average price of electricity has increased from Rs16.44 to Rs18.09 per unit.

The price has been increased on account of a fuel price adjustment for the first, second and third quarters of the current and last fiscal years. The decision will cause an additional burden of approximately Rs90 billion on Pakistani consumers.

The hike in the tariff will not apply to lifeline power consumers who use more than 300 units a month, which constitutes 80 percent of total consumers. According to Nepra, the price hike has been implemented from October 1. However, the decision will not apply to K-Electric consumers.

On September 15 last, Nepra revealed additional receipts of over Rs193 billion from the public for fuel price adjustment this year. According to Nepra documents, due to higher costs of generating power from January to July 2021, an additional Rs193.49 billion were collected from consumers as a fuel price adjustment. During this period, Rs48.74 billion units of electricity were sold at a total cost of Rs3.97 per unit.

Nepra documents state that in May, electricity became cheaper by Rs0.26 per unit due to fuel price adjustment. In June it became cheaper by Rs0.19 per unit. However, consumers could barely get relief of Rs4.5 billion.

On September 10, NEPRA increased power tariff by Rs1.38 per unit for July 2021 under monthly fuel price adjustment mechanism which imposed an additional burden of Rs21 billion on consumers. The increase was charged in the billing of September 2021 to all categories of consumers except lifeline consumers and KE consumers.

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