AUGAF

Pakistan Imposed Surcharge of PKR 3.39/kWh on Electricity Bills To Meet Last IMF Condition

Islamabad March 7 2023: National Electric Power Regulatory Authority allow application of additional surcharge of PKR 3.39/kWh on consumers of both DISCOs and K-Electric to cover the markup charges of PHL Loans.

On Friday, Finance Minister said “we have fulfilled all prior conditions for reaching agreement with IMF. The last condition which is recently been placed by IMF of electricity surcharge for the next year will be approved by the federal cabinet in next two to three days.”

However, the fund’s resident representative said on Monday said that Pakistan will be required to give an assurance that its balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding.

NEPRA has decided to allow application of additional surcharge through instant decision i.e. PKR 3.39/kWh to be recovered from the consumers of XWDISCOs, for the period from March to June 2023, to cover the markup charges of PHL loans for the FY 2022-23. For the FY 2023-24, the additional surcharge of PKR 3.39/kWh shall be reduced to PKR 1/kWh to cover the additional markup charges of PHL loans, thus the total surcharge shall become PKR 1.43/kWh for the FY 2023-24. The detail of surcharge to be recovered from different categories of consumers, during the FY 2022-23 and FY 2023-24 is as under:

For K-Electric, the Ministry the Government may maintain a uniform consumer-end tariff for K-Electric and state-owned distribution companies (even after privatization) through incorporation of direct / indirect subsidies. Accordingly, it has been submitted that K-Electric applicable uniform variable charge is required to be modified to recover the revenue requirements of K-Electric determined by NEPRA (inclusive of quarterly adjustments), keeping in view the proposed targeted subsidy and cross subsidies, which will also be consistent with the surcharge approved for XWDISCOs. In view thereof, the Authority has decided to allow application of the surcharge to be recovered from different categories of consumers of K-Electric, for the period from Mar to Jun 2023 and for the FY 2023-24, to cover the markup charges of PHL loans, as per the following schedule;