Pakistan Hikes Electricity Tariffs Amid Subsidy for Low-Usage Households

The Shehbaz Sharif government in Pakistan has increased electricity tariffs significantly for domestic, commercial, and agricultural consumers, with exemptions for those using up to 200 units monthly. This move follows approval by NEPRA and aims to manage the power sector's financial challenges.

In a significant policy adjustment, Pakistan's Shehbaz Sharif-led government has announced an increase in the base tariff of electricity prices for domestic consumers to Pakistani Rupees (PKR) 48.84. The announcement was cited by Pakistan-based Geo News, referring to The News. However, consumers using up to 200 units per month will be exempt from this hike for three months, according to a notification from the Power Division.

The tariff increase follows approval by the National Electric Power Regulatory Authority (NEPRA), which greenlit the government’s proposal to raise the electricity base tariff by up to Rs7.12 per unit for domestic consumers last week. NEPRA’s decision affects not just domestic users but also extends to commercial, general services, bulk, and agricultural consumers.

On July 5, NEPRA had sanctioned a PKR 3.3287 per unit increase in the electricity price for May 2024 due to monthly fuel charges adjustment (FCA), although it did not apply to K-Electric consumers. The federal cabinet also approved increases for commercial consumers by PKR 8.04, agricultural users by PKR 6.62, general services by PKR 6.96, and bulk consumers by PKR 5.96 per unit.

As a result, the base tariff for agricultural consumers is now PKR 46.83 per unit, and for general services, it stands at PKR 61.03 per unit. Bulk consumers will pay PKR 59.96 per unit, following an increase of PKR 5.51 per unit, effective from July. However, the base tariff for industrial consumers remains unchanged.

In an announcement at an event on Tuesday, Prime Minister Shehbaz Sharif confirmed a three-month subsidy for households using up to 200 units per month, aimed at alleviating their financial burden. He noted that these households represent 94 per cent of all electricity consumers, and the subsidy will be funded through the budget's development fund.

Additionally, the report mentioned that the government had previously increased the petroleum levy and agreed to impose a tax on agricultural income as part of broader fiscal measures. (ANI)