Brace for another massive hike in electricity tariff

ISLAMABAD: The federal cabinet has taken another decision to implement a major condition of the International Monetary Fund (IMF), to increase the electricity tariff.

his move, driven by the International Monetary Fund’s (IMF) demands for a bailout package, has sparked outrage and protests.

The new rates, effective from July, see a per-unit price increase of up to Rs7.12 or 51 per cent.

This translates to an additional burden of Rs580 billion on consumers this fiscal year. This is the largest percentage increase in electricity prices for low-income groups in Pakistan’s history.

The average electricity price has increased by Rs4.55 per unit, pushing the national average uniform rate from Rs28.44 to Rs33 per unit. This translates to a significant price hike for consumers across the board.

National Electric Power Regulatory Authority (Nepra) had sent the decision to the federal government to increase the basic tariff of electricity by an average of Rs5.72 per unit.

According to sources, the federal cabinet has approved an increase in the basic tariff of electricity and approval has been taken through circulation summary.

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According to the government sources, the decision of the federal cabinet will be sent to Nepra for uniform tariff.

However, the price increase is not uniform. The minimum rate now stands at Rs11.69 per unit, while the maximum rate has climbed to Rs48.84 per unit. These figures exclude additional charges such as taxes, quarterly adjustments, and monthly adjustments.

The government has implemented a tiered system, with the most significant increases affecting those consuming 1 to 100 units per month. This segment, primarily consisting of the poorest households, faces a 51% price hike, effectively doubling their electricity bills.

According to the sources, under the IMF conditions, the federal government will have to increase the basic electricity tariff by July 10.