Cabinet approves massive hike in electricity rates up to Rs 7.50 per unit

- Reuters
– Reuters
  • The hike is likely to come into effect from July 1.
  • Nepra will conduct a public hearing on Monday on the request of the government.
  • The government says that only 45% of consumers will be affected by the tariff hike.

Islamabad: The federal cabinet on Saturday approved a steep hike in the base tariff of electricity by up to Rs 7.50 per unit against the national average tariff fixation of Rs 4.96 by the power regulator.

Sources said that this approval was given by the cabinet through circulation summary. geo news And a request has been submitted to the National Electric Power Regulatory Authority (NEPRA).

Federal Energy Secretary Rashid Mahmoud Langriyal said 55% of electricity consumers would not be affected by the increase.

consumer increase
access up to 100 units Rs 3
who are using 101-200 units Rs.5
who are using 201-300 units Rs.5
who are using 301-400 units Rs.6.5
who are using 401-700 units Rs.7.5

Last week, the regulator hiked tariffs for loss-making power distribution companies (discos) to boost revenue collection during the current financial year.

The hike is scheduled to come into effect from July 1, following a formal notification by Nepra after a public hearing.

The federal government sought cabinet approval by way of cross-subsidy, adjusting different rates of increase for different consumer categories, though without affecting the overall revenue requirement.

According to a statement by Nepra, the revised national average tariff for the 2023-24 financial year has been fixed at Rs 29.78 per unit kWh, which is Rs 4.96 per unit higher than the national average tariff of Rs 24.82 fixed earlier.

While the regulator cited depreciation of the rupee, higher inflation and interest rates, addition of new capacities and overall lower sales growth as the reasons behind the increase, the hike was actually done to meet one of the conditions set by the International Monetary Fund (IMF) to initiate structural reforms in the energy sector.

However, the applicable tariff will be much higher after including surcharge, taxes, fees and levies apart from monthly and quarterly adjustments.

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