- Web Desk
- 4 Hours ago
Brace for another power tariff hike of Rs4.37
- Web Desk
- Aug 19, 2023
ISLAMABAD: The government has planned yet another increase of Rs4.37 per unit in electricity prices to recover an additional Rs122 billion from consumers in the next four months, which will take the total additional burden on them to Rs721 billion in this fiscal year alone.
But despite the planned increase, there will still be a Rs392 billion addition in the flow of the circular debt that will be offset with reduction in the debt stock through budget subsidies, official documents shared by the Express Tribune revealed.
The Rs4.37 per unit increase is aimed at keeping the circular debt at its current level of Rs2.31 trillion, as the Power Division does not see any improvement in higher electricity losses and theft that caused additional Rs236 billion losses in the last fiscal year.
The increase has been planned on account of the fourth quarter of last fiscal year’s adjustment that will be recovered from the consumers from September to December 2023, according to a revised Circular Debt Management Plan (CDMP) that the Power Division has shared with the International Monetary Fund (IMF).
The plan has revealed that a staggering Rs1.37 trillion more will be added to the country’s circular debt in a ‘business-as-usual’ move – a hole that the government now wishes to plug by increasing the price of electricity (Rs721 billion) and – around Rs600 billion in fiscal support to the bleeding sector.
The authorities have already increased the electricity prices on an average of Rs7 per unit on account of quarterly and annual base tariffs, which will help recover at least Rs600 billion from the consumers.
The plan, however, appears ambitious, as it has been made on the assumption that the rupee-dollar exchange rate is Rs286 per dollar and 19.4% Karachi Interbank Offered (KIBOR) rate. The current exchange rate stands at Rs295 and KIBOR is 22%.
An official of the Power Division said that the National Electric Power Regulatory Authority (Nepra) is scheduled to hold a hearing on the petition to increase the tariffs next week.
He said that depending upon Nepra’s decision, the federal cabinet will then decide about the actual increase that will be passed on to the consumers.
The electricity tariffs are already hitting the roof and the consumers are not able to pay their bills timely.
The sources said that the recovery of the bills in the jurisdiction of the Islamabad Electricity Supply
The government has budgeted Rs310 billion to clear some of the old dues of the power producers but the stock will increase further.