Govt’s plan to hike tariff by Rs7.91 given the nod

Base tariff likely to go up to Rs29.034/unit after imposition of 17% GST

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Friday allowed the federal government to charge a uniform tariff from the consumers of all power distribution companies (Discos) and K-Electric (KE) to pass on Rs7.91 per unit for the financial year 2022-23.

The government will recover the increase  in three phases -- July 2022, Aug-Sept 2022 and October 2022 onwards.

The power distribution companies will recover an additional amount of Rs893.83 billion from the consumers during the ongoing fiscal year.

Nepra had determined a different consumer-end for each ex-Wapda distribution company (XWDISCO) on June 2 this year.

“The tariff determined for the FY 2022-23, which on a national average is Rs24.82/kWh [after an increase of Rs7.91/kWh], 47% higher … than the earlier determined national average tariff of Rs16.91/kWh,” Nepra said in a statement. The earlier determined tariffs were intimated to the federal government.

The federal government, as per Nepra Act, had filed a motion for determination of uniform consumer-end tariff by the power regulator after incorporating subsidy and surcharges for all the XWDISCOs and KE.

In the application, the federal government had proposed that the basic electricity tariff for all DISCOs including KE be increased in three phases -- Rs3.50 per unit from July, other Rs3.50 from August and Rs0.91 per unit hike from October.

Nepra held a public hearing on July 20 and then approved the request of the federal government. However, no increase has been proposed for lifeline and protected category of consumers. The decision would be applicable once the federal government notified it, Nepra said.

Prime Minister Shehbaz Sharif had granted anticipatory approval to hike the base power tariff by Rs7.91 per unit. After the decision, the national average base tariff will go up to Rs24.82 per unit from the existing determined national average tariff of Rs16.91 per unit – a hike of almost 47%.

The base tariff is likely to go up to around Rs29.034 per unit. This will happen after the imposition of 17% general sales tax (GST) on each unit of the electricity price. After Nepra’s nod, the consumers will be facing another massive increase in the base tariff.

The Power Division in a summary submitted to the Economic Coordination Committee (ECC) of the cabinet last month had recommended passing on the increase in the base tariff to the consumers in three phases.

The decision of the ECC was placed before the federal cabinet for ratification in its meeting held on June 17.