Consumers to Face Rs5.72 per Unit Increase in Electricity Rates

ISLAMABAD:

Pakistani power consumers would face a significant Rs5.72 per unit (or 19.2 percent) increase in electricity base tariff as the National Electric Power Regulatory Authority (NEPRA) has received a request from the federal government to implement a uniform tariff for consumers of Distribution Companies (DISCOs) and K-Electric.Electricity Tariff Set to Surge by Up to Rs. 5 per Unit in FY 2024-25

NEPRA has scheduled a public hearing on Monday, July 8, to make an informed decision on the government’s application. In a public hearing notice, NEPRA invited all stakeholders, interested parties, and the general public to participate in discussions on the federal government’s motion regarding consumer-end tariffs for DISCOs and K-Electric, as per the NEPRA Act, 1997, and NEPRA Tariff Rules, 1998.

“Once considered and approved, this will lead to the determination of a ‘Uniform Final Tariff’ for notification by the federal government, effective from July 1, 2024, superseding the existing tariff,” stated NEPRA.

The federal government has requested NEPRA to reconsider and issue a uniform tariff schedule for DISCOs and to modify K-Electric’s tariff to maintain uniformity across the country. This aims to recover K-Electric’s revenue requirements as determined by NEPRA, considering proposed targeted subsidies and cross-subsidies.

Sources said that if the proposed Rs 5.72 per unit hike is approved, DISCOs and K-Electric will collect approximately Rs 486 billion from electricity consumers, as the base electricity tariff for FY 2024-25 will rise from Rs 29.78 to Rs 35.50 per unit.

Following NEPRA’s approval, the federal government will issue a notification to implement the new tariff. The Power Division stated on Thursday that the new electricity rates will be applicable from July 2024. The new tariff will have little impact on most people’s monthly bills as the government will provide a subsidy of Rs 440 billion to minimize increases in electricity bills.

According to the Power Division, the power price hike will be less than two percent for 16.8 million consumers, while the average increase for the more affluent 42 percent of consumers will be nine percent. Additionally, electricity rates are expected to decrease as the economy improves, with an average reduction of three percent anticipated by January 2025 compared to June 2024.

The fixed charges are necessary to cover 75 percent of the power sector’s fixed costs. The burden on the industrial sector has been reduced by Rs 150 billion to promote domestic industry. The new electricity rates will be officially notified after the NEPRA hearing, according to the Power Division.