ISLAMABAD: In response to public outcry and potential political backlash, the government has decided to roll back a previously approved 51% increase in electricity rates for protected consumers, meeting a ‘prior action’ required by the International Monetary Fund (IMF).
On the prime minister’s instructions, a revised summary exempting protected consumers from the hike will be urgently reviewed by the federal cabinet. This decision follows concerns over accumulated bills due to public holidays around Eidul Azha and higher consumption during hot weather, which had led to public unrest.
The National Electric Power Regulatory Authority (NEPRA) has postponed its public hearing from July 8 to July 10 to accommodate the revised summary. The proposed tariff hike aimed at raising Rs3.8 trillion for the fiscal year 2024-25 will now exclude consumers using up to 200 units per month.
To cover the resultant Rs50 billion revenue gap, the government will provide subsidies and adjust tariffs innovatively. The prime minister emphasized modifying the tariff increase and instructed immediate action before his departure to Quetta. Consequently, the power division circulated the revised summary by evening.
Originally, the tariff hike approved by the federal cabinet included a 51% increase for consumers using up to 100 units and a 41% increase for those using up to 200 units. This decision affected approximately 15.5 million consumers. However, consumers exceeding 200 units in any six months were categorized as ‘unprotected’ and faced substantial rate increases.
Other consumer categories, including commercial, general services, industrial, and agricultural users, also faced significant tariff hikes and new fixed capacity charges. Despite the rollback for protected consumers, the proposed tariffs are expected to generate Rs3.5 trillion for distribution companies in the current fiscal year, with the overall national base tariff averaging Rs35.50 per unit.
While the revised tariffs aim to address public concerns, the real, applicable average national tariff is expected to be between Rs65 and Rs72 per unit after including surcharges, taxes, and adjustments. The government continues to navigate the delicate balance between meeting IMF requirements and addressing the public’s financial burden.
Story by Khaleeq Kiani
