News Report
Nepra has decided to hike electricity prices up to Rs0.95 per unit for domestic consumers to cut subsidies.
Regulator takes a decision to reduce subsidies under Re-Targeting Power Sector Subsidies — Phase-Il. It will help the government reduce subsidies amounting to Rs 20 billion.
Under Re-Targeting Power Sector Subsidies-phase 1, the regulator increased electricity prices up to Rs1.68 per unit.
It became effective from November 1, 2021to to collect Rs135 billion extra annually.
Now, the Nepra increased the average tariff by Rs 0.20 per unit.
Over increase will be Rs 0.8 to Rs 0.95 per unit for domestic consumers under Re-Targeting Power Sector Subsidies — Phase-Il.
The Nepra had sent its decision to the federal government that would issue the final notification in this regard.
Energy Ministry said the intention of the government is to provide subsidies to only vulnerable consumers.
Electricity Prices Increased to Reduce Subsidies
The reduction in subsidy for non-protected consumers amounts to around Rs.20 billion.
Nepra observed that although provision of subsidy is the mandate of the government.
In light of observations of the Supreme Court Pakistan in human Rights Case, the Federal Government has to come to NEPRA to revise rates.
At present, the government is providing around Rs.268 billion to domestic consumers.
It provides around Rs.197 billion subsidies to non-protected consumers.
- Cabinet approves Rs 100b payment to Power Sector
- Loan Payment: ECC Okays adjustment of Rs 273b in Power
- Nandipur Power Plant: Scams, Scandals, and Probe
The government will reduce subsidies gradually in order to avoid sudden price shocks to the consumers.
Similarly, the protected consumers receive a subsidy of around Rs.71 billion.
Ministry said that consumers pay a markup on delayed payments.
Mr. Tanvir Bari, representing KCCI opposed the request of the Ministry keeping in view the recent high monthly FCAs.
Mr. Asad Saleem, a consumer, raised serious concerns regarding the increase in tariff of around Rs.3.11/kWh from 200-300 units slab to above 300 units slab.
Energy ministry explained that currently, the effective rate of 300-400 units slab is Rs. 14. 78/kWh against the proposed rate of Rs. 15.73/kWh.
Thus there would be an increase in electricity prices of around Rs.0.95/kWh.
The Ministry said that protected consumers including lifeline are 9.9 million.
Non-protected consumers up to 300 units are 16.8 million, and other domestic consumers above 300 units are around 0.63 million.
The number of ToU consumers is around 0.41 million.