ISLAMABAD: The average tariff of electricity for the consumers will be increased by around Rs4 per unit on July 1.
The government’s Circular Debt Management Plan (CDMP) updated recently involves two different mechanisms for increasing the electricity tariff: annual tariff rebasing and monthly reduction in subsidy for electricity consumers from 101 to 600 units.
The average cost for users with 700 or more units will be Rs22.22 per unit in fiscal year 2022–23, effective July 1, 2022, excluding taxes. The government would enhance cost of electricity by Rs2.92 per unit effective July 1, 2022, in order to account for annual rebasing. The first increase will be Rs0.75 per unit in February 2022, and the second will be Rs2.17 per unit on July 1, 2022.
Meanwhile, further hike in electricity prices will occur as a result of the IMF and World Bank’s desire to eliminate power sector subsidies in Phase II of the Subsidy Reform. The unprotected slabs of power tariffs from 101 to 200 units will increase by Rs0.18 per unit, from Rs10.18 to Rs10.36 per unit.
According to Geo TV report, tariffs for slab users with 301 to 400 units will increase from Rs14.78 to Rs15.73 per unit, representing a 0.95 per unit increase. For slabs of 501 to 600 units, the power cost will be hiked from Rs 17.16 to Rs 18.11 per unit, a 0.95 per unit rise. Tariffs for electricity slab users with a capacity of 700 units or more would remain constant at Rs 22.22 per unit from July 1, 2022.
According to the revised CDMP, the power tariff will increase by Rs2.92 per unit due to the annual re-basing of the average tariff, as well as by Rs0.75 per unit in February 2022 to reflect the higher devaluation of the Pakistan Rupee against the US dollar, and by another Rs2.17 per unit in July 2022 due to the annual re-basing of the average tariff.
