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NEPRA has increased the national power tariff by 20%

Islamabad: On Friday, the National Electric Power Regulatory Authority announced a nearly 20% increase in the uniform national tariff, aiming to secure approximately Rs3.8 trillion for the 10 former Wapda electricity distribution companies (Discos) in the fiscal year 2024-25.

The increase of Rs5.72 per unit, effective from July 1 pending government notification, is expected to generate an additional Rs485 billion in revenue for the Discos. This move strengthens the government’s position in seeking an IMF bailout in July.

Nepra’s determination allows for adjustments in rates across consumer categories through cross-subsidies without compromising the overall revenue requirement set by the regulator.

The average national base tariff, inclusive of K-Electric, is now fixed at Rs35.50 per kilowatt-hour (kWh) for the upcoming fiscal year, compared to Rs27.78 in the current year. This adjustment is projected to yield about Rs3.763 trillion in revenue for the 10 Discos in 2024-25, up from Rs3.28 trillion this year.

After adding an 18% general sales tax, the average base tariff for the next year will rise to Rs42 per unit before additional taxes, duties, and surcharges, placing an extra burden of approximately Rs580 billion on Disco consumers. This calculation excludes any impacts on K-Electric, which falls under a separate tariff regime for Karachi.

The tariff adjustments are crucial for securing an IMF bailout, aligning with commitments made to international financial institutions. Nepra’s detailed review also includes projections on power purchase prices (PPP), emphasizing capacity charges and energy costs as significant components affecting tariff revisions.

The upcoming tariff revisions are pivotal for Pakistan’s energy sector reforms and the viability of state-owned enterprises, setting the stage for economic stabilization and governance improvements.

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