The Ministry of Finance and NEPRA (National Electric Power Regulatory Authority) have reached an agreement on increasing electricity tariffs, with an announcement expected today of a reduction in the tariff by Rs. 4 to Rs. 6 per unit.
According to details, the IMF (International Monetary Fund) approved a $3 billion SBA (Stand-By Arrangement) loan, and the State Bank of Pakistan received the first installment of $1.2 billion. However, a decision on the tariff increase is still pending.
The reports said that the IMF wanted the government to implement the desired tariff increase on electricity, and the government had no option but to comply.
However, the officials from NEPRA and the Ministry of Finance spent the entire day on Thursday deliberating on the proposed increase in the base tariff for the fiscal year 2023-24. They believe that the increase should be on the lower side, considering the exchange rate, inflation, GDP growth, and the actual growth in electricity sales during the fiscal year 2024.
If the base tariff is kept below the range of Rs. 4-6 per unit, the monthly fuel charges adjustment and the quarterly tariff adjustments will be higher. On the other hand, if the base tariff announcement falls between 6.5 to 7 rupees per unit, consumers will have to pay an additional amount as FCA (Fuel Cost Adjustment).
The officials stated that both parties reached a near-consensus on the proposed increase in the base tariff, and the regulator can finalize the proposal today (Friday) and announce the new base tariff.
Some members of the regulator also prefered that the new base tariff not be too high.