In a bid to ease the burden on electricity consumers, the government has announced a substantial subsidy of 158 billion rupees. As part of this relief measure, there will be no increase in electricity prices for consumers using up to 200 units.
The Chairman of the National Electric Power Regulatory Authority (NEPRA) recently presided over a hearing to consider the government’s request for a potential increase in the basic price of electricity, amounting to 7.5 rupees per unit. During the session, representatives from the Power Division provided a comprehensive briefing to NEPRA.
The officials from NEPRA highlighted that the primary factors contributing to the proposed tariff increase are the devaluation of the rupee and capacity payments. However, they emphasized that determining the extent of the increase for each consumption slab is ultimately a political and administrative decision vested in the government’s authority.
Member Nepra Rafiq Shaikh inquired about the legal basis for the subsidy and how it is allocated to different consumption categories. He sought clarification on the specific law that empowers the government to provide subsidies to consumers.
Addressing concerns about the impact of subsidies on other consumers, Chairman Nepra expressed his reservations about the practice of providing subsidies to specific groups. He stressed that subsidizing certain segments of consumers puts an additional burden on other users.
Power Division officials responded by stating that approximately 40 percent of consumers in the country are living below the poverty line. As part of its social welfare efforts, the government aims to extend the subsidy to 90 percent of consumers, providing much-needed support to those facing economic challenges.
Member Nepra Rafiq Shaikh raised the question of global electricity rates and how they compare to the situation in Pakistan. A representative from the All Pakistan Textile Mills Association (APTMA) noted that even a one percent increase in tariffs can negatively impact export-oriented industries. He further highlighted the challenges faced by commercial users who are subject to high tariffs and emphasized the need to find viable solutions.
NEPRA has concluded the hearing on the proposed 7.5 rupees per unit electricity price increase and has reserved its decision. Following a thorough review of the details, the decision will be conveyed to the federal government, which will then issue a notification regarding the implementation of the electricity price adjustments.
