ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved an increase in the base electricity tariff from 3.95 per unit to Rs 7.12 per unit.
The new base tariff is set at Rs 48.84 per unit for domestic consumers. The monthly tariffs for various consumption brackets are as follows:
- 201 to 300 units: Increased by Rs 7.12 to Rs 36.89 per unit.
- 301 to 400 units: Increased by Rs. 7.02, fixed at Rs 39.15 per unit.
- 401 to 500 units: Increased by Rs 6.12, set at Rs 41.36 per unit.
- 501 to 600 units: Increased by Rs 6.12 to Rs 42.40 per unit.
- 601 to 700 units: Increased by Rs 6.12 to Rs 43.79 per unit.
- Above 700 units: Increased by Rs 6.12 to Rs 48.84 per unit.
On Wednesday, NEPRA held a public hearing to take up the federal government’s proposed electricity tariff increase for power distribution companies (DISCOs) and K-Electric (KE). The hearing was conducted in response to a motion filed under Sections 7 and 31 of the NEPRA Act, accompanied by the Tariff (Standard & Procedures) Rules of 1998.
The federal cabinet had previously approved an increase of up to Rs 7.12 per unit in the base electricity tariff, set to take effect from July 1, 2024.
The hearing, presided over by NEPRA Chairman Waseem Mukhtar, included participation from officials of the Power Division, Central Power Purchasing Agency (CPPA), and CEOs of various electricity companies.
Power Division officials assured during the hearing that there would be no increase in electricity tariffs during the summer for 86% of domestic consumers in the country. They highlighted the government’s subsidies, including Rs 177 billion for K-Electric and Rs 313 billion for DISCOs consumers.
Member NEPRA, Maqsood Anwar Khan, emphasised that 65% of customers would not be affected by the hike, urging a review of the data to confirm this.
Officials revealed that the electricity price had been fixed at Rs 300 per dollar, with capacity payments increasing by 38 paise per unit compared to the previous year.
Additionally, Rs 490 billion in subsidies would be allocated for domestic consumers, ensuring relief of Rs 4 to Rs 7 for 86% of them. A Rs 730 billion cross-subsidy would be provided to DISCOs consumers.
Despite the proposed tariff increase, Power Division officials assured there would be no major hike, describing the change as a tariff resetting. They argued that the adjustments ending in July would further reduce consumer bills and that keeping tariffs stable was expected to boost industrial growth. Notably, 77% of industrial consumers would not be subject to fixed charges.
Previously, the federal government filed a motion for uniform tariff application as per the NEPRA Act, seeking to incorporate targeted subsidies, reduce fixed charges, and adjust variable rates. An addendum was later filed to keep the tariff for residential consumers with consumption up to 200 units unchanged until September 2024.
Wednesday’s hearing was initially scheduled for July 8, 2024, but was rescheduled for July 10, 2024. And, on July 10, NEPRA reserved its decision.
It is pertinent to mention that this hike in the base electricity tariff will place an additional burden on power consumers, who are already struggling with skyrocketing inflation and significant increases in both power and fuel prices. This latest increase will add to the financial strain on households and businesses, exacerbating the challenges faced by many in managing their monthly expenses amidst the ongoing economic pressures.
