Govt jacks up power tariff by Rs3.50 per unit

Further increases will take place in Aug and Oct, boosting national average tariff to Rs24.82 per kWh


Zafar Bhutta July 27, 2022
CCOE requested participants to submit way forward for improvement of performance of power distribution companies. photo: file

ISLAMABAD:

The federal government on Tuesday announced an increase in the basic electricity tariff by Rs3.50 per unit to Rs20.41 with immediate effect.

The government will increase Rs7.91 per unit in base electricity tariff from national average of Rs16.91 per unit to Rs24.82 per kWh to recover an additional Rs893.83 billion from consumers during the ongoing fiscal 2022-23.

The government on Tuesday implemented the first phase of increase in base tariff by Rs3.50 per unit effective from July 26, 2022.

In the second phase, the government will further increase base electricity tariff by Rs3.50 from August and 91 paisas per unit from October.

In response to a motion filed by the federal government, the National Electric Power Regulatory Authority had recently allowed charging uniform tariff from the end consumers of all power distribution companies and K-Electric by Rs7.91 per unit for the financial year 2022-23.

Federal Minister for Power Khurram Dastgir and Minister of State for Petroleum Musadik Malik announced the increase in electricity tariff during a joint news conference on Tuesday.

The power minister said that the cabinet had approved the increase in electricity rates.However, he said that the government had protected the poor segment of the society as the electricity rates had not been increased for users consuming one to 50 units a month.

“There will also be no increase in tariff for consumers using 200 units a month.”Dastgir said energy prices would start decreasing from November, adding that by December, the basic electricity tariff would be Rs24 per unit.

“Much of the increase in the bills will come in the form of fuel surcharges and there will be no increase on account of fuel adjustment due to higher electricity base tariff,” the minister said.
Earlier, the government had increased in electricity rates in February.

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Dastgir said that the federal cabinet had taken important decisions regarding electricity rates.There will be uninterrupted power supply to industrial feeders in the country, the minister said, adding that five major export-oriented sectors would be provided gas and electricity at low cost.

He said the purpose of the decision was to benefit from exports and Pakistan's export industry was fully ready for competition.In June, he said, the electricity production from Tarbela Dam went up to 4,500 megawatts.

The minister revealed that both coal and gas were not available in the world market at the moment, but gas was available from friendly countries.

“Efforts are being made to increase power supply and ensure its availability,” he said, adding that the next few months would be difficult due to rise in the electricity rates.Dastgir claimed that circular debt had come down by Rs214 billion.

Currently, the amount of unpaid bills to the Power Division amounted to Rs1,000 billion, the minister claimed. “The recovery of these bills stood at Rs300 billion in 2018 when the PML-N government left. Now, these bills have increased sevenfold.”

Dastgir announced that a new law was in the works that would bring transparency in commercial transactions between governments. “Many friendly countries want to invest in Pakistan.”

He added that there were delays regarding privatisation, adding that the draft law on privatisation for investment in Pakistan would soon land in the assembly for approval.

On Tuesday, Prime Minister Shehbaz Sharif approved the appointment of Privatisation Commission chairman. Abid Hussain Bhayo, the federal minister for privatisation, has been entrusted with the charge through a notification.

Addressing the media persons, the minister of state for petroleum said that the efforts being made by the incumbent government to provide relief to the masses from soaring inflation would start yielding results from November this year.

Malik again tried to shift the blame on the previous government for all the ills, saying had it increased electricity production prices, which had not been done since February 2021, “we would not have been facing such difficulties”.

“These electricity prices will not have any effect on 45% of Pakistan's population,” Malik claimed, adding that around 13 million people were in the “protected” slab.

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