ISLAMABAD: The government on Wednesday approved a staggering 51% increase in electricity tariffs, forcing millions of poor households to bear an additional cost of Rs580 billion in this fiscal year. The hike, effective from July, is the highest in terms of percentage for lower-income groups.
A total of 32.5 million consumers, primarily households, will face this unprecedented increase due to longstanding mismanagement and flawed energy policies. Among these, 26 million households belong to the poorest to low-middle income groups, who will see the most significant rate hikes.
For the first time, residential electricity consumers will also be subject to fixed monthly charges ranging from Rs200 to Rs1,000 per unit. This tariff increase is a crucial prerequisite set by the International Monetary Fund (IMF) for Pakistan to qualify for the next bailout package.
The federal cabinet approved the summary for the tariff increase through circulation, bypassing the usual open discussion during a regular cabinet meeting. The Power Division initially moved a similar summary on June 14, but it was withdrawn due to IMF objections on the new industrial package.
The new electricity prices range from Rs3.95 to Rs7.12 per unit for residential consumers, resulting in a national average uniform rate increase from Rs28.44 per unit to Rs33 per unit. The poorest consumers, using 1 to 100 units monthly, will see a 51% increase from Rs7.74 to Rs11.69 per unit.
Commercial users will experience a rate hike of up to Rs5.84 per unit or 15%. Additionally, fixed charges for industrial consumers have been revised, with the federal government approving charges ranging from Rs400 to Rs1,250 per kilowatt per hour per month.
Despite heavy taxation and rising public discontent, the government remains committed to these measures as part of its efforts to secure the IMF bailout.
Story by Shahbaz Rana
