National Electric Power Regulatory Authority (NEPRA) has reserved its judgement on the proposed hike of Rs0.95 per unit in the power tariff, and announced to issue a detailed decision on the matter after scrutiny of the submitted facts.
NEPRA conducted a hearing today regarding the power tariff hike, to be implemented at the start of February.
NEPRA Chairman Tauseef Farooqi said that the provision of subsidy was the mandate of the government and NEPRA’s role is limited only to determine the electricity tariff. He said that the power division of the Ministry of Energy had devised the subsidy reform programme which was approved by the Economic Coordination Committee (ECC) of the cabinet.
Farooqi said that the subsidy reform programme will be implemented after getting NEPRA’s approval in three phases, while the first phase was made applicable from October 2021. He said that the government, in the first part of the second phase, was reducing the subsidy and removing one-slab benefit of cheaper rate, besides an increase in the applicable tariff of unprotected consumers category of the power consumers.
There will be no increase in the tariff of the protected category of the consumers, he said. “Subsidy worth Rs20 billion will be reduced with effect to the proposed hike in the power tariff,” the NEPRA chairman said.
Farooqi said that the government had been providing Rs238 billion worth of subsidy to the power consumers. Non-protected consumers category was being given Rs 197 billion worth of subsidy whereas protected consumers were receiving Rs38 billion worth of subsidy.
“The government is reducing Rs20 billion worth of subsidy for power consumers,” he added.
According to details, the government had been reducing the electricity subsidies as part of the understanding reached with the World Bank and the International Monetary Fund.(IMF). The ECC, after deliberation, had already approved the summary presented by Ministry of Energy on Re-targeting of Power Sector Subsidies – Phase –II, which included removal of one slab benefit (incremental block tariff) and incorporation of revised subsidy and inter-distribution companies tariff rationalisation.
