Cabinet approves Rs3.50/unit hike in power tariff

ISLAMABAD: The federal cabinet has approved Tuesday an increase of Rs3.5 per unit in the power tariff, however, around 45% of the poor population or more than 80 million people would not be affected by the hike.

Federal Minister for Power Khurram Dastgir said this, while addressing a press conference on the cabinet decisions related to electricity tariffs.

He was flanked by State Minister for Petroleum Musadik Masood Malik. Prime Minister Shehbaz Sharif headed the Cabinet meeting held here.

An increase of Rs3.50 per unit from June 26 and another increase of Rs3.50 per unit from August whilst in October, the tariff will be increased by 0.90 paisa per unit, he added. Tariffs will start decreasing from November after reflection of fuel surcharge in the tariff, the minister said.

The minister assured that the cabinet decision of an increase in electricity tariff will have no extra burden on the poorest consumers and coming few months will be difficult for household consumers.

The cabinet decision would not impact those whose bill would remain below 50 or 100 units. On June 3, 2022, the National Electric Power Regulatory Authority approved a substantial increase of Rs7.91 per unit in the basic power tariff. Following this increase in the tariff price of one unit has soared to Rs24.82.

Cabinet hasn’t approved Rs7.91/unit hike in power rates yet: Dastgir

The cabinet further decided to ensure provision of round-the-clock power to the dedicated industrial feeders in a bid to safeguard the livelihoods of the industrial workers and their families. “We shall try to minimize power interruption on the mixed feeders”, he added.

The cabinet has also considered providing gas and electricity to five major export sectors on subsidized rates and final decision will be announced shortly. He claimed that electricity tariff is matching with the regional countries for industrial consumers.

He maintained that the consumers are already paying some portion of this increase in the form of fuel surcharge each month which will now be reflected in the tariff.

He said the prices of fuel started increasing from February 2021 globally but not increased locally.

Khurram Dastgir said that the circular debt stands at Rs2.25 trillion after a decrease of Rs214 billion due to steps being taken to reduce line losses.

Speaking on the occasion, Minister of State for Petroleum Musadik Malik said the present government of Shehbaz Sharif has required six months to determine their performance following tough economic decisions.

He said the government is revising rebasing of power sector which has been pending since February 2021. He said the previous government of the PTI was charging monthly fuel adjustment charges but not announced rebasing to avoid criticism.

Copyright Business Recorder, 2022