Nepra notifies massive increase in power tariffs by up to Rs7.50

• Govt application seeking hike in tariffs approved after public hearing.
• Despite increase, govt "would be picking up subsidy of Rs158 billion".
• Cabinet okayed massive increase in base tariff by up to Rs7.50 per unit. 

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has notified a massive increase in the base tariffs of electricity by up to Rs7.50 per unit at the request of the federal government.

In a notification issued on Tuesday, the power regulatory authority said the new tariffs would be effective from July 1, 2023.

It further said that the federal government’s application seeking the hike in tariffs was approved following a public hearing on the matter held on Monday (July 24) at Nepra Tower Islamabad.

The power ministry during the hearing submitted that the increase requested through the “Instant Motion” is within the overall revenue requirement determined by Nepra and despite the proposed increase, the government would be picking up a subsidy of Rs158 billion, the notification added.

The federal cabinet last Saturday gave a go-ahead to a massive increase in the base tariff of electricity by up to Rs7.50 per unit against the national average tariff determination of Rs4.96 by the power regulator.

The approval was given by the cabinet via circulation summary, sources told Geo News and a request has been submitted to Nepra.

A day earlier, Prime Minister Shehbaz Sharif said that lifeline (up to 100 units) and protected category of consumers (101-200 units per month) would be exempted from the recent massive increase in the power tariff.

Earlier this week, the regulator also hiked the tariff to increase revenue collection for the loss-making power distribution companies (Discos) during the current fiscal year.

The federal government sought approval from the cabinet, adjusting different rates of increases for various consumer categories through cross-subsidy, though without affecting the overall revenue requirement.

According to a Nepra statement, the revised national average tariff for the 2023-24 fiscal year has been determined at Rs29.78 per unit kWh, which is Rs.4.96 per unit higher than the previously determined national average tariff of Rs24.82.

While the regulator cited the rupee’s devaluation, high inflation and interest rates, the addition of new capacities and overall low sales growth as reasons behind the increase, it was actually hiked to meet one of the conditions set by the International Monetary Fund (IMF) of introducing structural reforms in the energy sector.

However, the applicable tariff would be much higher after including surcharges, taxes, duties and levies, besides monthly and quarterly adjustments.