The National Electric Power Regulatory Authority (NEPRA) has increased the base electricity tariff for the consumers using monthly 100 to 700 units from eight paisas to 95 paisas.
It has sent the decision to the Ministry of Energy to announce the same within 30 days of the issuance of the decision in the matter of Policy Guidelines forwarded by the Ministry of Energy (MoE) under Section 31 of the Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997 for Re-Targetting Power Sector Subsidies — Phase-II.
NEPRA decided under the government guidelines to reduce power sector subsidies under the International Monetary Fund’s (IMFs) tough conditions.
As per the decision sent to the MoE, eight paisas per unit will be increased for consumers who use up to 100 units a month. Similarly, 18 paisas for 101 to 200 units, 48 paisas for 201 to 300 units, 95 paisas per unit for 301 to 700 units have been approved. The decision also protects lifeline consumers from this increase.
The decision reads, “The instant Decision is being intimated to the Federal Government for notification in the Official Gazette under Section 31(7) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 within 30 days from the intimation of this Decision. In the event the Federal Government fails to notify the subject tariff Decision or refer the matter to the Authority for reconsideration, within the time period specified in Section 31(7), then the Authority shall notify the same in the official Gazette pursuant to Section 31(7) of NEPRA Act”.
NEPRA had held the hearing on January 24, 2022. During the hearing, the MoE submitted that Phase-I of the subsidy reforms proposal had been approved by NEPRA and notified by the federal government with effect from October 1, 2021.
Regarding Phase-II, the government intends to provide a subsidy to only the style vulnerable consumer classes and to simplify the different tariff slabs for simplicity and clarity. a two-phase approach has been considered in this regard, whereby a reduction in subsidy and the removal of the Incremental Block Tariff (IBT) has been proposed as a first step.
The proposed reduction in subsidy for non-protected consumers is around Rs. 20 billion. The MoE further clarified that the removal of the IBT does not mean that consumers will be given the benefits of all the previous slabs but all the consumed units will be charged according to the slab in which they fall.
The increase in electricity prices will be implemented after the approval of the federal government.
It is pertinent to mention here that Prime Minister Imran Khan had recently addressed the nation and announced a reduction in the price of electricity by five rupees per unit and had announced not to increase the price until the upcoming budget.
