The National Electric Power Regulatory Authority (NEPRA) issued a notification on Friday to increase the baseline tariff of electricity to all the consumers in the country.
The tariff has increased by Rs. 1.68 per unit for residential consumers and Rs. 1.39 per unit for all other consumer categories with effect from November 1.
The residential consumers under monthly consumption of 200 units would remain protected from price hikes through the subsidy.
The decision would generate about Rs. 168 billion for the power companies and reduce subsidy otherwise paid out of the budget during the current fiscal year. The revision would increase the average base power tariff, excluding various taxes, surcharges, and duties, etc, from Rs. 13.68 per unit at present to Rs. 15.36 per unit.
In its motion to the authority, the Ministry of Energy said that the government is now protecting consumers only to the extent of 200 units per month. The first 50 units (lifeline consumers) would be charged at Rs. 3.95 per unit while another category of lifeline consumers — 51 to 100 units per month — had been created to be charged at Rs. 7.74 per unit.
Consumers using 101 to 200 units would be charged at Rs. 10.06 per unit without any change and excluding taxes. All residential consumers above the 200-unit threshold would pay an additional Rs. 1.68 per unit. The tariff increase will be effective from November 1 and will be applicable to all power distribution companies and K-Electric.
The power division said that about 45 percent of non-time of use consumers would remain protected. The increase in tariff would be applied prospectively and is within the overall revenue requirement determined by NEPRA.
While the tariff increase had been allowed by the authority, its vice-chairman Rafique A. Shaikh in a minor dissent noted that the national electricity policy required timely recovery of the full cost of service but the cost should be prudent. “Any inefficiencies and capacity payments could not be charged to the consumers’.
Earlier last month Energy Minister Hamad Azhar announced to increase the baseline power tariff to Rs. 1.39 under an agreement with the International Monetary Fund to reduce budgetary subsidies and to get much-needed finances.