Another bombshell as NEPRA approves Rs3.33 per unit electricity hike

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) approved an additional hike of Rs3.33 per unit in electricity tariffs on Friday, a day after the Ministry of Energy announced a substantial increase of approximately Rs7 per unit, effective July 1. The NEPRA notification, which enforces the hike under fuel adjustment charges, takes immediate effect and will impact July bills.

On Wednesday, the government approved an up to 51% or Rs7.12 per unit increase in electricity prices, marking the highest percentage hike for lower-income groups. According to The Express Tribune, the increase will force 32.5 million consumers, primarily households, to pay an extra Rs580 billion this fiscal year. This rate is on top of the existing electricity cost, attributed mainly to decades of mismanagement and flawed energy policies.

Out of these 32.5 million consumers, 26 million households fall within the poorest to low-middle income categories, the segments experiencing the highest percentage price increase.

For the first time, the government has imposed fixed monthly charges on residential electricity consumers, ranging from Rs200 to Rs1,000 per unit. This tariff increase was a key condition set by the International Monetary Fund (IMF) for Pakistan to qualify for the next bailout package.

A top government official confirmed to The Express Tribune that the federal cabinet approved the price increase summary through circulation, bypassing the usual route of the Economic Coordination Committee (ECC) of the Cabinet. This method of approval, different from open discussion in a regular cabinet meeting, means that the hike affects about 32.6 million consumers without a cabinet debate.

Earlier, the Power Division had moved a similar summary on June 14, but it was withdrawn due to IMF objections to the new industrial package. The IMF also rejected the prime minister’s Rs200 billion package, which proposed an industrial electricity price of Rs34.99 per unit. The new approved rate for industrial electricity is now Rs37.83 per unit.