Inflation-battered Pakistanis were dealt another blow when the National Electric Power Regulatory Authority (NEPRA) announced a major hike in electricity tariffs.
The new rate translates into an increase of $3.32 per unit, which will directly affect home and business budgets. This has led to hardships for many citizens as the cost of essential items has risen.
The adjustment aims to account for changes in fuel prices, which directly affect the cost of power generation. However, the increase comes at a difficult time for consumers, who are facing rising costs of essential goods and services.
The NEPRA notification outlines the specifics of the tariff changes that will be reflected in the upcoming electricity bills. The regulatory body periodically reviews and adjusts electricity prices based on various factors, including changes in fuel costs.
Federal Cabinet
Earlier, the federal ministry had approved an increase of PKR 5.72 per unit in the basic electricity tariff. The decision, which was taken by executive summary, was sent to the National Electric Power Regulatory Authority (NEPRA) for uniform implementation of tariffs.
The electricity department has applied to NEPRA to increase the tariff effective from July 1, 2024 for the financial year 2024-2025. The average electricity tariff will increase from PKR 29.78 to PKR 35.50.
The latest NEPRA report shows a huge loss of PK3 403 billion in Pakistan’s electricity sector in the fiscal year 2022-2023. This loss is attributed to losses and low recovery rates from nine electricity distribution companies, including K-Electric, which did not achieve 100% recovery. The report also states that these companies do not purchase electricity according to their quota, which leads to deliberate oversupply.
20% increase in national tariff
In June, NEPRA announced an increase of about 20% in the unified national tariff for the financial year 2024-2025, which aims to provide about PKR 3.8 trillion to 10 electricity distribution companies (Discos) in Wapda. The amendment is expected to generate an additional PKR 485 billion in income for DISCO and help the government to bail out HPG, which is scheduled for July.
NEPRA said the government reserves the right to apply different growth rates in different consumption categories, ensuring that the total revenue requirement set by the regulator remains unaffected.
