Major Power Tariff Hike Looms for Consumers


ISLAMABAD – The National Electric Power Regulatory Authority (Nepra) has announced a public hearing on July 8 to discuss the proposed increase in electricity tariffs, which could pass an additional Rs700 billion burden onto consumers in the current fiscal year. This increase, set to take effect on July 1, 2024, will see the average national tariff rise by around Rs5.72 per unit, significantly impacting all ex-Wapda distribution companies (Discos) and K-Electric customers.

The most affected will be protected consumers, who could face a staggering 51% increase in their electricity rates. This hike is part of the International Monetary Fund’s (IMF) structural benchmarks and prior actions, making the public hearing largely procedural.

On June 14, Nepra had already announced an almost 20% (Rs5.72 per unit) increase in the uniform national tariff, aiming to generate approximately Rs3.8 trillion for the 10 Discos during the fiscal year 2024-25.

The government plans to provide minor subsidies for lifeline consumers using up to 100 units per month. However, for other consumer categories, the increase will be more substantial. Protected consumers using up to 100 units per month will see a 51% rise, while those using up to 200 units per month will face a 41% increase. This will affect over 15.5 million consumers.

Unprotected consumers will also see significant hikes, with the tariff for the first 100 units rising by more than 43% (Rs7.12 per unit) to Rs23.6 per unit, impacting another 5.95 million consumers. The 101-200 unit slab will see a 31% increase, and the 201-300 unit slab will see a 27% rise.

Consumers using more than 300 units will face a 14-22% increase, along with a new fixed capacity charge ranging from Rs200 to Rs1,000 per kilowatt, depending on their sanctioned load capacity. Agricultural consumers will also be subjected to a fixed capacity charge of Rs400 per kilowatt, with their tariffs increasing by 19-44%.

Commercial, general services, industrial, and bulk consumers will face a fixed capacity charge increase to Rs1,250 per kilowatt, along with a 17% increase in commercial tariffs. Industrial tariffs for the B1 category will decrease by 6-8%, but off-peak rates for larger industries will rise by 8-11%.

The power division projects that the proposed tariff hike will generate Rs3.5 trillion for the 10 Discos this fiscal year, about Rs580 billion more than last year. Including the impact of the 18% GST, total revenue is expected to reach around Rs4.2 trillion, with further adjustments for monthly fuel charges and quarterly tariff revisions.

The average national base tariff, including for K-Electric, is set to rise to Rs35.50 per unit for the next fiscal year, up from Rs29.78 per unit this year. Factoring in surcharges, taxes, duties, and other adjustments, the real applicable average national tariff is expected to be between Rs65 and Rs72 per unit. Nepra is anticipated to finalize and formally notify these changes by July 10.

Story by Khaleeq Kiani

Related posts