Cabinet Approves Rs. 7.91 Hike in Electricity Tariff

The Federal Cabinet has approved the Rs. 7.91 per unit hike in electricity tariff after repeated deferrals.

Federal Minister of Power, Khurram Dastgir, announced the decision during a press conference with Minister of Petroleum, Musadik Malik.

Dastgir said Prime Minister Shehbaz Sharif was keen to provide maximum relief to the public, and therefore, the approval was given only after 45 percent of the population was excluded from the increase in tariff.

Minister of Petroleum, Musadik Malik, revealed that by excluding the protected sector, the households with consumption of fewer than 200 units per month, i.e., 13 million connections or up to 90 million people had been omitted from the hike.

Previously, the National Electric Power Regulatory Authority (NEPRA) had reserved its decision on the government’s request regarding the tariff hike. According to the approval, the government will increase the tariff by Rs. 3.5 per unit from 26 July, whereas an increase of the same price will be imposed during August. The government will then increase the tariff by Rs. 0.91 per unit in October, completing the total increase of Rs. 7.91.

Explaining the drastic surge in tariff, Musadik Malik said that the rebasing of fuel adjustments and transmission losses had not been done on regular basis during the previous government. The last rebasing was done in February 2021, and fuel surcharges were increased without informing the public.

He told the media that after the imposition of the tariff, the fuel surcharges would decrease as 90 percent of the total amount would be covered in the newly approved tariff.

Further criticizing the PTI government, the petroleum minister said that the previous government had shut down many efficient plants running on regasified liquified natural gas (RLNG) and instead favored a few plants running on furnace oil to benefit certain people. Consequently, the production of electricity decreased despite the availability of power plants. Dastgir mentioned that receivables of the Power Division increased from Rs. 300 billion to Rs. 1000 billion during 4 years of PTI.

The power minister briefed the media that the current government had paid Rs. 214 billion in circular debt, reducing the total amount from Rs. 2,476 billion on 31 March 2022 to Rs. 2,253 billion on 30 June.

The ministers assured the media that the prices of electricity would decrease after December as fuel adjustments are cleared. They said that the policies of the current government were public-friendly, and the government was trying its best to provide maximum relief to the public.