Govt. Approves Electricity Price Increase By Rs1.90 Per Unit

increase in electricity prices

Taking a step towards the revival of the International Monetary Fund (IMF) program, the government has decided in principle to increase electricity prices by Rs 1.90 per unit in the current billing month.

According to the Dawn, an official announcement is expected in a day or two. A federal minister told Dawn that a news conference had been called to explain the rationale behind the tariff hike, but it was postponed at the last minute on the instructions of the prime minister’s office.

The government convened the news conference after a meeting of the Cabinet Committee on Energy (CCOE) chaired by Planning and Development Minister Asad Omar. In addition to Asad Umar, Information Minister Shibli Faraz, Energy Minister Umar Ayub Khan and Special Assistant to the Prime Minister Tabish Gohar were present at the news conference.

However, it was cancelled a few minutes before the scheduled time. The cabinet member said the prime minister’s office did not want to announce an increase in electricity prices as well as an increase in petroleum prices on Friday, so the news conference had to be cancelled and reconvened in the next two days.

However, he said the price hike would take effect from January 1. He said that the National Electric and Power Regulatory Authority (NEPRA) has increased the base tariff of all former WAPDA distribution companies (Discos) by an average of Rs 3.30 per unit but a series of meetings in the Prime Minister’s Office has come to an end.

The sudden increase would be a serious blow to consumers who are already infected with the coronavirus, so it was decided that the increase in the first phase should not exceed Rs 1.90 per unit. The cabinet member said that it has been decided that the tariff increase will be done in phases and in the first phase the price was increased by Rs 1.90 per unit.

While the rest will be added in the second phase. Following the amendment to the NEPRA Act, all 10 discs had filed separate applications for an increase in their existing tariffs for FY 2019 and FY 2020. The tariff demanded by Discus included an increase of 10% to 27%. However, on 31st December 2020, NEPRA approved an increase in the average price of FY 2019 and FY 2020 by 24.72% or Rs 3.30 per unit. According to NEPRA, the basic price of electricity should be increased from Rs 13.35 per unit to Rs 16.65 per unit. The total impact of such an increase is estimated at around Rs 280 billion.

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