The Nepra is planning to increase electricity rates by an additional Rs4 billion per month, which will put an additional burden of Rs94 billion on consumers.
NEPRA Hike Price:
The move comes after the government’s decision to remove subsidies from electricity tariffs in an attempt to reduce its deficit and bring down its debt.
The country’s high energy prices have been a problem for several years, with mounting pressure from consumers, businesses, and even power plant owners who are struggling to stay profitable.
Several arguments have been risen regarding this huge rise. People are saying that the increase in electricity rates is due to faulty agreements with Independent Power Producers (IPPs) made by the previous governments, and inefficiency and power theft by power facilitating agencies.
The previous government’s political appointments to power distribution companies resulted in instances of malpractice and corruption.
This led to the collapse of Pakistan’s energy sector, which is currently trapped in a circular debt of multibillion-rupee proportions. However, the present government (coalition government) has raised the base tariff by Rs7 per unit which led to a hike in electricity rates.
Additionally, the tariff increases on account of fuel adjustments were also taken into account while calculating the new electricity bill.
The government has been facing intense pressure from the public over the surge in fuel prices, which has forced Prime Minister Shehbaz Sharif to extend a fuel adjustment waiver to users utilizing up to 300 units per month.
The basic issue was that the standard set electricity rates had increased to Rs24 per unit from Rs16 per unit, which was a huge increase in our overall costs.
This also meant that there were fewer people who could afford our products and services. We were worried about the impact this would have on our business, as well as on the people who rely on us for their jobs.
The National Electric Power Regulatory Authority (Nepra) held a public hearing at their headquarters in Islamabad regarding the fourth quarter adjustment of DISCOs for FY2021-22.
The purpose of this hearing was to gather feedback from stakeholders on how much DISCOs should be allowed to charge customers for electricity during the fourth quarter, and what factors should be considered when making this decision.
Nepra has announced that the current quarterly adjustment in electricity prices will be over by September. This means that consumers will no longer have to pay a separate surcharge for the previous three months.
The hearing was presided over by Nepra Chairman, Tauseef H Farooqui; however, some other members including Rafiq Ahmed Sheikh and Maqsood Anwar Khan were there at the time of the meeting regarding the electric units that have been increased.
Pakistan’s energy regulator, Nepra, has approved the transfer of Rs94.39 billion from Wapda DISCOs to power consumers on account of quarterly adjustments for the fourth quarter of FY2021-22.
The burden will be transferred to consumers under the new tariff structure, which is based on a weighted average cost of generation and wheeling charges (WACC), effective from anytime in the next month.
Furthermore, In a request submitted to Nepra, XWDISCOs had put forward a demand to raise almost Rs3.1 per unit basically in the name of capacity costs, variable costs and maintenance costs, cost of transmissions, market operation costs, and the impact of T&D losses on FCA for the second quarter of FY 2021-22 which will be in between April to June 2022.
The total amount for which the increase in tariffs was asked is about Rs14 billion.