Rs7.50/ unit jump harmful for businesses: PIAF chief
It is unfortunate that the National Electric Power Regulatory Authority is all set to accord final approval for massive raise in electricity base rates up to Rs 7.50 per unit (27 percent) for industry, commercial sector, agriculture tube-wells, AJK, public lighting and other categories of consumers, who will now have to face the brunt of Rs7.50 per unit
ISLAMABAD: While describing the government’s decision to increase electricity base tariff by Rs7.50 per unit as harmful for the trade and industry, as the businesses are already under financial stress, the PIAF Chairman Faheemur Rehman Saigol urged the government to reverse the proposed jump in power charges.
In a statement issued here on Sunday, he said the government’s decision to increase the electricity tariff is anti-industry, and the PIAF strongly condemns the government’s move and calls on it to rescind it. He urged the power ministry to identify system constraints and communicate targets to all concerned departments in order to launch a wartime effort to upgrade the transmission system.
It is unfortunate that the National Electric Power Regulatory Authority is all set to accord final approval for massive raise in electricity base rates up to Rs 7.50 per unit (27 percent) for industry, commercial sector, agriculture tube-wells, AJK, public lighting and other categories of consumers, who will now have to face the brunt of Rs7.50 per unit.
The PIAF Chairman said that the average sale rate would reach now Rs28.36 per unit from Rs22.59 per unit, posting an increase of Rs5.76 per unit of which variable charges are Rs27.65 per unit – from Rs21.90 per unit with an increase of Rs5.75 per unit and fixed charges of Rs0.01 per unit – to Rs0.70 per unit from Rs0.69 per unit, as the government intends to earn Rs477 billion though this rebasing.
Faheem Saigol said that the increase in base rate of electricity is also part of pact signed between government and International Monetary Fund, which says that the government has to notify Nepra’s determinations without any delay and amendment.
The Regulator is scheduled to hold a public hearing on Monday just as an eye wash, on Motion of Leave of Federal government submitted by the Power Division for adjustment in tariffs of Discos and K-Electric, already approved by the Federal Cabinet through circulation. The rate of one unit of electricity for those consumers who will use over 300 units months will touch Rs55.52 per unit after inclusion of FCAs, taxes and surcharges whereas for some categories it will be over Rs60 per unit.
On July 14, 2023, the Nepra approved average rebasing in tariff of Rs 4.96 per unit across the board but the government, after intensive consultation, decided to pass more financial impact of proposed increase to unprotected domestic consumers and other categories through cross subsidization to protected category of domestic consumers and adjustment of Rs 148 billion subsidy.
According to the Federal Government’s Motion, the tariff of protected category of domestic consumers will not be changed which means Rs 3.95 per unit for up to 50 units per month, Rs 7.74 per unit for 51-100 and 001-100 units and Rs 10.06 per unit for 101-200 units.
He argued that this is a big blow to electricity-heavy industries, if not passed on to the consumers. It could also affect the businesses, who are reliant on grid. Roughly this could mean over Rs50/bag impact if their goods are produced using grid.
He said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector. He said that the high cost of doing business has proved to be dangerous for Pakistan’s industry, discouraging investment both in capacity and capability, calling for lessening the burden of heavy taxes on the power sector.