Govt to Increase Base Electricity Tariff to Rs. 29.03 Per Unit for Next Fiscal Year

The government is all set to increase the base power tariff by Rs. 9.254 per unit, taking the base tariff (including GST) from the existing Rs. 19.78 to Rs. 29.03 per unit during the first quarter of the next fiscal year.

After the nod of the Economic Coordination Committee (ECC) of the Cabinet, the government has decided to increase the base tariff in three phases, an official source told ProPakistani. The summary in this regard is to be moved to the Federal Cabinet soon, the source said.

In the first phase starting 1 July, the base tariff will be enhanced by Rs. 3.50/unit, followed by another increase of the same amount from 1 August. The remaining increase of Rs. 0.91/unit will be passed on to the power consumers on 1 September, the source said.

Earlier this month National Electric Power Regulatory Authority (Nepra) had recommended a hike of almost 47 percent (Rs. 7.91 per unit) in base power tariff. After the decision, the national average base tariff will be Rs. 24.82 per unit from 1 July 2022, rising from the existing determined national average tariff of Rs. 16.91 per unit determined by the power regulator for the financial year 2021-22.

The average base tariff currently being charged to the consumers is Rs. 19.78, after the imposition of 17 percent GST. After the application of 17 percent GST to the new base tariff, the per-unit cost will reach around Rs. 29.034 per unit by the end of the first quarter of FY 2022-23.

The source added that monthly FCA has nothing to do with the base tariff and cannot be added to that increase. The base tariff is permanent, while the FCA is not constant, and it changes month to month depending on the cost of the fuel.

Similarly, the base tariff is not just for one company but for the whole country. The FCA for Discos and KE is being determined separately.
The withdrawal of the Rs 5/unit subsidy announced by the previous government has also nothing to do with the base power tariff. The subsidy was announced by the previous government to protect the consumers from a hike in monthly FCA.