Government Seeks 25% Hike in Electricity Tariff


ISLAMABAD: The government has formally proposed a significant increase of about 25% in the base national electricity tariff, to take effect from July 1, 2025. This hike aims to secure approximately Rs4 trillion in revenue for power companies in FY25.

The National Electric Power Regulatory Authority (Nepra) has scheduled a public hearing for May 23 to examine a petition filed by the Central Power Purchasing Agency (CPPA) on behalf of power companies. The petition seeks an increase in the power purchase price (PPP) ranging from Rs4.40 to Rs6.51 per unit for FY25.

The CPPA, representing the power sector, has presented seven scenarios for electricity sales in FY25, estimating sales between 131,000 and 139,000 gigawatt hours (GWh) with demand growth from 3% to 5%. The proposed increase averages Rs6.80 per unit in PPP, a 25% rise based on an annual revenue requirement of about Rs3.6 trillion.

Factoring in distribution margins and prior-year adjustments, the average sale rate for the next fiscal year would be Rs37 per unit, up from Rs29.78 per unit this year, marking a 25% increase. A major part of the increase, nearly 50%, is attributed to the energy purchase price (EPP), projected to rise to Rs1.16 trillion to Rs1.26 trillion from Rs840.5 billion this year.

Additionally, the capacity payment price (CPP) is expected to rise by 16% to Rs19.8 per unit. Transmission, service charges, and distribution margins add approximately 66 paise per unit.

These proposed changes are part of a broader circular debt management plan to be approved by the International Monetary Fund (IMF) as part of the next bailout package. The CPPA’s PPP forecast for FY25 was finalized in consultation with Nepra, Power Division, K-Electric, and other relevant entities to ensure consensus.

Story by Khaleeq Kiani

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