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Tuesday July 16, 2024

Power tariff for domestic consumers hiked by up to 51pc

Unprotected consumers falling in slab of 1-100 units a month will experience a maximum hike

By Khalid Mustafa & Rana Ghulam Qadir
July 05, 2024
A general view of the high voltage lines during a nationwide power outage in Rawalpindi on January 23, 2023. — AFP
A general view of the high voltage lines during a nationwide power outage in Rawalpindi on January 23, 2023. — AFP

ISLAMABAD: In a bid to unlock the IMF programme of over $6 billion, the government has taken another prior action by increasing the applicable end-power tariff of protected consumers by up to 51 per cent and unprotected consumers by up to 43pc from July 1, 2024.

Among protected consumers’ categories, those who fall under the slab of 1-100 units per month will pay 51pc more in their tariff as their tariff has increased by Rs3.95 per unit from Rs7.74 to Rs11.69 per unit. Also, those protected consumers who fall under the slab of 101-200 will pay 41pc more as their tariff has increased by Rs4.10 per unit from Rs10.06 to Rs14.16 per unit. For the unprotected consumers, the first four categories will experience a 22-43pc increase in their power tariffs.

The unprotected consumers falling in the slab of 1-100 units a month will experience a maximum hike in the tariff in percentage term as these consumers will pay 43pc more in their tariff as their tariff has increased by Rs7.11 per unit to Rs23.59 from Rs16.48 per unit. And those who fall in the slab of 101-200 units a month will pay 31pc more as their tariff has swelled by Rs7.15 per unit to Rs30.10 from the existing Rs22.95 per unit.

Those falling under the slab of 201-300 units per month will pay 26pc more as their tariff has increased by Rs7.12 per unit because their tariff has escalated to Rs34.26 from Rs27.14 per unit. Likewise, those who fall in the fourth category of the 301-400 units slab will experience a 22pc surge in the tariff as their tariff has jumped by Rs7.12 per unit to Rs39.15 from Rs32.03 per unit.

Similarly, consumers who fall in the category of 401-500 per month unit slab will face 17pc increase as their tariff has surged by Rs6.12 per unit to Rs41.36 from Rs35.24 per unit and those using 501-600 units a month will also brave the increase in tariff by 17pc as their tariff has swelled to Rs42.78 from 36.66 per unit. Consumers who utilise 601-700 units a month will face 16pc increase as their tariff has gone up by Rs6.12 per unit to Rs43.92 from Rs37.80 per unit and those who consume above 700 units per month will face a 14 percent hike as their tariff has increased by Rs6.12 per units to Rs48.84 per unit from Rs42.72 per unit.

Earlier on June 14, 2024, Nepra finalised the base tariff for FY25 at Rs5.72 per unit. The federal cabinet approved it and increased the tariff of all categories depending upon the subsidy to be provided to the protected and some unprotected consumers after the withdrawal of Rs150 billion cross-subsidy which the industrial sector was extending to them.

With the increase in base tariff, the government power sector will secure Rs3.6 trillion in FY25 as revenue from the electricity consumers. For the outgoing FY24, the increase in base tariff was notified at Rs4.96 per unit, which is why the base tariff was set at Rs29.78 per unit. Now the new base tariff for FY25 will increase to Rs35.50 per unit.

The distribution companies (DISCOs) have also submitted a petition seeking a uniform tariff for FY25, and Nepra will hear the petition on July 8, 2024. After that, new tariffs for all categories will be notified which will become effective from July 1, 2024.

Meanwhile, the Power Division, in its announcement, said the government had earmarked a subsidy of Rs440 billion to ensure less increase in the tariff to be effective from July 1, 2024. The statement claimed that 58pc vulnerable consumers will face less than a 2pc increase on average in their tariff. However, 42pc rich consumers will brave a 9pc average increase in their tariff. The Power Division also claimed that till January 2025, tariff of all categories will tumble by 3pc. It also advocated for imposing 75pc fixed charges in the tariff. It also announced that the cross-subsidy of Rs150 billion from the industrial sector had been done away with resulting in decrease in the industrial tariff which is vital to stimulate industrial activities.

Meanwhile, the federal cabinet has also approved an increase in the fixed charges of electricity. According to the sources, the cabinet has increased the monthly fixed charges to 184 percent for industrial consumers of electricity. As much as 150 percent increase in monthly fixed charges has been approved for commercial electricity consumers while for agricultural tubewell customers 100 percent increase in monthly fixed charges has been approved. According to sources, the federal cabinet has approved the increase in fixed electricity charges through the circulation summary.

The monthly fixed charges for industrial users will increase from Rs440 to Rs1,250. Those for commercial users will increase from Rs500 to Rs1,250 and the fixed charges for agricultural tubewell users will increase from Rs200 to Rs400. The increase in electricity fixed charges is proposed to be implemented from July 1, 2024.