Rs8 per unit increase in power tariff on the cards

Rise said to be in phases from July 1; move in line with IMF demand, power companies’ request

ISLAMABAD:

The burden of inflation on consumers is expected to get heavier as the electricity tariff is likely to increase by Rs8 per unit from July 1 this year.

Currently, the basic power tariff is Rs16 per unit and if the government adheres to the International Monetary Fund’s demands and the power distribution companies’ request, it will be more than Rs24 per unit.

The IMF has demanded of the government to end the subsidies on fuel, electricity and food items for the release of $1 billion loan tranche. The prices of fuel have already been jacked up by Rs30 per litre in line with the international lender’s demand.

However, sources said, the increase in electricity prices will be in the form of basic tariffs, the application is likely to be in phases.

According to sources in the Ministry of Energy, 10 power distribution companies have requested the National Electric Power Regulatory Authority to increase the tariff, but the final decision lies with Nepra.

Nepra is expected to take the decision this week as it has completed the hearings on the revenue requirements of these power distribution companies.

The sources said that after the decision of Nepra, the Power Division will be able to make the final move of increasing the price of electricity and the federal government will also decide on the targeted subsidy.

According to the sources, due to fuel prices, high dollar, revolving credit and losses of companies, electricity will become more expensive. However, the increase in prices may not be a lump sum. According to them, at present the basic electricity tariff in the country is more than Rs16.50 per unit.

If Nepra and the Ministry of Energy decided to go ahead with the power distribution companies’ request and to meet the IMF’s demand, the average basic tariff may exceed Rs24 per unit.