IMF condition: Nepra allows Rs3.23/unit surcharge from July 1

ISLAMABAD: Despite a strong opposition from consumers, Nepra on Friday allowed the federal government the application of Rs3.23 per unit surcharge on power consumers across Pakistan from July 1. 

The Authority decided to allow application of enhanced surcharges through instant decision to be recovered from different categories of consumers of both XWDISCOs and K-Electric, from the FY2023-24 and onward w.e.f. 01.07.2023, said the Nepra decision issued here Friday.

It is worth mentioning here that Nepra had already allowed the federal government to impose an additional surcharge of Rs3.39 per unit and Rs1 per unit from March-June 2023 and July 2023 to June 2024, respectively. With the application of an additional Rs3.39 per unit, the total surcharge becomes Rs3.82 per unit for the four months of 2022-23, as the government is already charging Rs0.43 per unit from power consumers. While, for the new fiscal year starting July 1, the surcharge will be Rs1.43 per unit.

However, in a motion filed by the federal government with respect to Consumer End Tariff recommendations of XWDlSCOs and K-Electric, it has been requested that the already approved surcharges of Rs3.82/unit and Rs1.43/unit, are not sufficient to meet the electric services’ obligations of the government. The federal government has requested to enhance the surcharge by Rs1.80/unit from the already approved Rs1.43/unit to Rs3.23/unit for the next fiscal year. Nepra had conducted a public hearing on the federal government motion. During hearing while responding to the query from the Authority regarding financial obligations of the federal government, the representative of the MoE explained that presently the financial obligations of the government are around Rs2.6 trillion, which includes over Rs1.7 trillion payables to IPPs and Rs765 billion of PHL loans. Through the instant motion, the total surcharge would be around Rs335 billion, which will cover Rs126 billion of the PHL markup, and the remaining Rs209 billion to cover the flow of circular debt. It also submitted that there are multiple factors/reasons for these payable to IPPs, which primarily includes interest payable to IPPs for not making them timely payments, delayed application of monthly FCAs and quarterly adjustments, etc.