Power Tariff Raised By Rs 14 Per Unit To Placate IMF

Power Tariff Raised By Rs 14 Per Unit To Placate IMF
The price of electricity has been increased by Rs. 14.24 per unit for consumers across Pakistan. The country's National Electric Power Regulatory Authority (NEPRA) has authorised an increase in thr power tariff, as the Pakistani government is taking desperate and unpopular measures to secure financial assistance from the International Monetary Fund (IMF).

According to details, NEPRA has issued a decision to collect amounts deferred for the two months (August and September) of the current fiscal year from the electricity consumers in the next eight months.

On the instructions of the prime minister, the federal energy ministry had postponed the collection because of adjustment of fuel charges during these two months due to floods in most areas of the country. According to the NEPRA decision, all electricity distribution companies (DISCOs) and K-Electric will recover charges from electricity consumers between March and October 2023.

This year, electricity suppliers have been allowed to charge up to an additional Rs. 14.24 per unit, in which protected consumers using 200 units or less will be charged an additional Rs. 10.34 per unit over the coming eight months.

Non-protected customers using up to 300 units will also be charged an additional Rs. 14.24 per unit, while farmers will be charged an additional Rs 9.90 per unit in the next eight months.

In the same period, K-Electric customers will be charging an additional Rs. 9.97 per unit from protected customers using up to 200 units, and Rs. 13.87 per unit from unprotected customers up to 300 units.

Private agricultural consumers will be charged Rs 9.90 per unit. According to the NEPRA decision, all electricity distribution companies and K-electric consumers will be charged Rs. 2.75, Rs. 2.75, Rs. 2.25, Rs. 0.95, Rs. 0.79, Rs. 1.50, Rs. 1.75 and Rs. 1.13 per unit respectively in the coming eight months, while NEPRA has also issued a decision to increase the price tariff of electricity by 48 paisa per unit in the context of monthly fuel charges adjustment.

The Central Power Purchasing Authority (CPPA) held a hearing on February 28 on the request to increase electricity price tariff by Rs. 1.17 per unit for January in view of monthly fuel charges imposed by NEPRA. According to NEPRA's decision, the actual fuel charges in the month of January were Rs. 11.03 per unit while the reference fuel charges for the same month were Rs. 10.55, warranting the Rs. 0.48 per unit increase in electricity price.

NEPRA has also directed all electricity distribution companies to separately explain this increase to electricity consumers, and collect it in the bills for March 2023. NEPRA has also issued a stipend for K-Electric to increase the price of electricity by Rs. 1.71 per unit for the monthly fuel charges adjustment.

In the February 28 hearing, K-Electric had requested Rs. 2.70 per unit for monthly fuel charges adjustment for the month of January. According to the decision, this increase for January will be charged to the customers in the bills for the month of March.

Similarly, NEPRA has issued a decision on the request of the energy ministry to withdraw the subsidy on regionally competitive energy rates given to the Kissan package and to five export sectors from March 1, 2023.

The ministry of energy has returned to NEPRA the concessional rate of electricity given to five export sectors, which was Rs. 19.99 per unit, and the special relief package given to private agricultural consumers of Rs. 3.60 per unit, in light of the federal cabinet's decision on February 28, 2023. Since any kind of subsidy to electricity consumers is under the jurisdiction of the federal government, these two subsidies have also been withdrawn with effect from March 1, 2023.

It should be noted that the incumbent government has increased the subsidy and tariff on electricity on the condition of IMF, and has put an additional burden of 76 billion rupees on the consumers.