Islamabad July 14 2023: Pakistan National Electric Power Regulatory Authority increased electricity prices by 20 percent due to cover cost of distribution companies to meet IMF commitments.
The revised National Average tariff for the FY 2023-24 has been determined as Rs.29.78/kWh, which is Rs.4.96/kWh higher than the previously determined national average tariff of Rs. 24.82/kWh.
Progress on structural reforms, particularly with regard to energy sector viability is one of the key reform agenda of IMF program. Pakistan authorities urgently need to strengthen energy sector viability by aligning tariffs with costs, reforming the sectors cost base, and better-targeting power subsidies, states IMF.
NEPRA determines different consumer-end Tariff for each distribution company (XWDISCO), owing to their different revenue requirements and allowed different level of T&D losses.
The determined tariffs are intimated to the Federal Government to file uniform tariff application.
The uniform tariff so determined by NEPRA after incorporating the amount of subsidy/ surcharges as intimated by the GoP, is notified by the GOP to be charged from the consumers.
MEPCO, GEPCO, HESCO, SEPCO, QESCO, PESCO & TESCO filed Adjustment/indexation request under Multi-year tariff regime for FY 2023-24. IESCO, LESCO & FESCO filed Multi-Year Tariff petitions for FY 2023-24 to FY 2027-28, and also requested for Interim Tariff for FY 2023-24.
The Authority, has accordingly, determined the consumer-end tariff for FY 2023-24.
The increase of Rs.4.96/kWh is mainly due to overall low sales growth, PKR devaluation, high inflation, exorbitant interest rates and addition of new capacities etc.
Total Revenue requirement of XWDISCOs is projected as Rs.3,281 billion with projected sales of 110,165 GWh for the FY 2023-24.
Any relief of decrease in tariff will be directly transferred to the consumers in future, in case of appreciation of PKR, decrease in inflation and interest rates etc.