Preparations are in progress to impose an additional financial burden exceeding Rs 310 billion on electricity consumers in Pakistan. The Central Power Purchasing Agency (CPPA) has submitted a proposal for a significant increase in the base tariff for the fiscal year 2024-25. This proposal, which includes seven different scenarios for power purchase prices, estimates a range from Rs 25.03 to Rs 27.11 per unit.
The National Electric Power Regulatory Authority (NEPRA) is scheduled to make a decision on this proposal tomorrow. If approved, the overall burden of power purchase prices is expected to reach Rs 3.58 trillion, significantly impacting electricity consumers.
In addition to the proposed base tariff hike, there is also a likely increase in the tariff due to fuel charges adjustment (FCA) for April 2024. This could result in an additional Rs 3.49 per unit increase.
The CPPA, representing power distribution companies (DISCOs), has already submitted an application to NEPRA for this increase. NEPRA has scheduled a public hearing on May 30, 2024, to discuss this proposal. If it receives approval, the increase will be reflected in consumers’ electricity bills for June 2024.
Furthermore, Pakistan’s power sector is grappling with a significant increase in circular debt, which has reached Rs 2,635 billion as of January 2024. Despite substantial hikes in power tariffs and fuel adjustments, the circular debt continues to grow.
A report by the power division indicated that the circular debt was Rs 2,310 billion as of June 2023, marking an increase of Rs 325 billion over the following seven months up to January 2024.
These developments signal continued financial strain on electricity consumers and highlight ongoing challenges within Pakistan’s power sector.
