Govt Increases Electricity Tariff for Domestic Consumers

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ISLAMABAD — The Shehbaz Sharif-led government has announced a significant increase in the base tariff for domestic electricity consumers, raising it to Rs48.84 per unit. This decision follows the government’s commitment to increase the petroleum levy and impose a tax on agricultural income.

According to a notification issued by the Power Division, this increase will also affect consumers in Karachi, except for those using up to 200 units per month, which are exempt from the increase for three months.

Details of the Hike

The hike comes after the National Electric Power Regulatory Authority (Nepra) approved the federal government’s request for an increase of up to Rs7.12 per unit for domestic consumers last week. The approval was part of a broader proposal to adjust tariffs for domestic, commercial, general services, bulk, and agricultural consumers.

Recent Tariff Adjustments

On July 5, Nepra also approved a hike of Rs3.3287 per unit in the electricity price for May 2024 due to monthly fuel charges adjustment (FCA). However, this increase did not apply to K-Electric consumers.

The federal cabinet has also approved increases in base tariffs for various consumer categories:

  • Commercial consumers: Up by Rs8.04 per unit
  • Agricultural consumers: Up by Rs6.62 per unit
  • General services: Up by Rs6.96 per unit
  • Bulk consumers: Up by Rs5.96 per unit

Following these hikes, the new base tariffs are:

  • Agricultural consumers: Rs46.83 per unit
  • General services: Rs61.03 per unit
  • Bulk consumers: Rs59.96 per unit

However, the base tariff for industrial consumers remains unchanged.

Exemption for Low-Usage Consumers

Prime Minister Shehbaz Sharif has announced a three-month subsidy for households using up to 200 units of electricity per month, which accounts for 94% of electricity consumers. This subsidy will be funded through the development fund of the budget.

Overview of the New Tariffs for Domestic Consumers

  • 201 to 300 units: Tariff increased by Rs7.12 to Rs34.26 per unit
  • 301 to 400 units: Duty expanded by Rs7.02 to Rs39.15 per unit
  • 201 to 300 units: Duty expanded by Rs7.12 to Rs34.26 per unit
  • 601 to 700 units: Tax settled at Rs43.92 per unit
  • 501 to 600 units: Tax settled at Rs42.78 per unit
  • 700+ units: Duty settled at Rs48.84 per unit
  • 401 to 500 units: Tax expanded by Rs6.12 to Rs41.36 per unit

Additionally, Lifeline users up to 50 units per month will pay Rs3.95 per unit, while those using 51 to 100 units will pay Rs7.74 per unit.

IMF Program and Future Prospects

The increase in tariff is aimed at improving Pakistan’s chances of securing a new program from the International Monetary Fund (IMF). The country has since reached a three-year, $7 billion bailout program, pending validation by the IMF’s Executive Board. This program is anticipated to offer assistance to Pakistan to accomplish macroeconomic steadiness and cultivate conditions for more grounded, more comprehensive, and strong development. The new IMF program has been endorsed by both federal and provincial governments.

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