After several deferrals, the Federal Cabinet has approved an increase in electricity tariff of Rs. 7.91 per unit.
Khurram Dastgir, Federal Minister of Power, announced the decision during a press conference with Musadik Malik, Minister of Petroleum.
Dastgir stated that Prime Minister Shehbaz Sharif was eager to provide maximum relief to the public, so the approval was granted only after 45 percent of the population was exempted from the tariff increase.
Musadik Malik, Minister of Petroleum, revealed that by excluding the protected sector, households with consumption of less than 200 units per month, i.e., 13 million connections or up to 90 million people, were excluded from the hike.
The National Electric Power Regulatory Authority (NEPRA) had previously reserved its decision on the government’s request for a tariff increase. According to the approval, the government will raise the tariff by Rs. 3.5 per unit beginning on July 26, with another increase of the same amount imposed in August. In October, the government will raise the tariff by Rs. 0.91 per unit, bringing the total increase to Rs. 7.91.
Musadik Malik explained the sharp increase in tariffs by stating that the previous government did not perform regular rebasing of fuel adjustments and transmission losses. The most recent rebasing occurred in February 2021, and fuel surcharges were increased without notice to the public.
He told the media that after the tariff was implemented, fuel surcharges would be reduced because the newly approved tariff would cover 90 percent of the total amount.
Further criticizing the PTI government, the petroleum minister stated that the previous administration had closed many efficient plants that ran on regasified liquified natural gas (RLNG) and instead favored a few plants that ran on furnace oil to benefit a few people. As a result, despite the availability of power plants, electricity production decreased. Dastgir stated that the Power Division’s receivables increased from Rs. 300 billion to Rs. 1000 billion during the PTI’s four-year tenure.
According to the power minister, the current government has paid Rs. 214 billion in circular debt, bringing the total amount from Rs. 2,476 billion on March 31, 2022 to Rs. 2,253 billion on June 30, 2022.
The ministers assured the media that electricity prices would fall after December as fuel adjustments were completed. They stated that the current government’s policies were public-friendly, and that the government was doing everything possible to provide maximum relief to the public.