ISLAMABAD: The government has decided to impose an additional surcharge on power consumers in accordance with this the Ministry of Energy Power Division has issued a notification for a hike in the power tariff by Rs 2.80 per unit, it was learnt on Saturday.
According to the power division’s notification, additional surcharge of will be applicable on electricity consumers including domestic, commercial, general service, bulk, agricultural tube-wells etc of all power distribution companies (DISCOs) including K-Electric with effect from July 1, 2023 for an indefinite period. Â
Under the notification, this increase in the tariff will not be applicable to domestic consumers consuming 300 units per month from the start of July to the end of October.
Whereas the exemption to domestic and agricultural consumers also ends from November and they will have to pay the additional surcharge of Rs 2.80. However, for the months from July to October, the surcharge will also not be applicable to the agricultural consumers.
As per sources, the power consumers are already bearing the brunt of Rs 0.43 per unit surcharge; the additional surcharge will also be imposed by the government to meet the conditions of the International Monetary Fund (IMF).
“This increase in the price will burden the already burdened power consumers”, they added.
“After the issuance of the Rs 2.80 per unit additional surcharge notification by the power division, the total surcharge to be paid by the power consumers through monthly electricity bills will stand at Rs 3.43 per unit,” said sources.Â
The additional surcharges have also been imposed on domestic, commercial, industrial, general services and bulk categories of electricity consumers for an indefinite period.
Earlier, the National Electric Power Regulatory Authority (NEPRA), in a recently issued notification, stated it has decided to allow application of enhanced surcharges through instant decision to be recovered from different categories of consumers of both DISCOs and K-Electric, from the FY 2023-24 and with effect from July 1, 2023.
The fresh surcharge shall be shown as a separate head in the consumers’ bills, notification added.
According to NEPRA’s decision in the matter of the motion from the federal government about the recommendation of consumer end tariff for DISCOs and K-Electric.
In a letter from the Ministry of Energy (MoE) in March submitted an instant motion with respect to the consumer end tariff for DISCOs & K-Electric with NEPRA and informed that the already approved surcharges are not sufficient to meet the electricity services obligations of the government.Â
It also stated that non-payment to power producers may result in loss of generation capacity and since the payments to the power producers have been secured by sovereign guarantee, issued by the Government of Pakistan, the power producers shall start calling upon the sovereign guarantees along with the imposition of late payment surcharge.
The MoE further mentioned that National Electricity Policy, 2021, provides that “financial sustainability of the sector is premised on the recovery of full cost of service, to the extent feasible, through an efficient tariff structure, which ensures sufficient liquidity in the sector”.Â
Also, the ministry of energy reported that in due course, financial self-sustainability will eliminate the need for government subsidies.
NEPRA said the power division claimed that presently the financial obligations of the government stood at around Rs 2.6 trillion, which includes over Rs 1.7 trillion payables to IPPs and Rs 765 billion of Power Holding Limited loans.
Through the decision, the total surcharge would be around Rs 335 billion, which will cover Rs 126 billion of the Power Holdings Limited (PHL) markup, and the remaining Rs 209 billion to cover the flow of circular debt.
On March 6, NEPRA had already allowed the government to charge Rs 3.82 per unit surcharge for the remaining four months of the current year and then continue on a permanent basis with Rs 1.43 per unit surcharge for next fiscal year.
However, the government reverted to NEPRA after two days with a fresh petition saying the Rs 1.43 per unit surcharge for next year was not enough to meet the financial requirements and requested an increase of Rs 1.80 to Rs 3.23 per unit from July to mop up Rs 335 billion for paying off debt and cost of power theft of inefficient power companies.
The power division said the government was empowered under the NEPRA law to collect surcharges from the consumers for the fulfilment of any financial obligation of the federal government with respect to electric power services within the bracket of 10% of the aggregate revenue requirement of all power suppliers.
The article highlights the increase in electricity rates and the reasons behind it. It also mentions the directives given by NEPRA to ensure that the surcharge is not charged from low-income domestic consumers.