National Electric Power Regulatory Authority (NEPRA) has approved a 4.34 per unit increase in the power tariff for the month of July 2023. This is the second time in a month that NEPRA has increased the power tariff. The last increase was on June 13, 2023, when the power tariff was increased by 4.46 per unit. NEPRA jacks up power tariff
The latest increase in the power tariff is due to the rising cost of fuel. The fuel cost adjustment (FCA) for the month of July has been calculated at Rs4.34 per unit. This means that the government will have to provide a subsidy of Rs59 billion to the power distribution companies (DISCOs) to offset the increase in the FCA.
The increase in the power tariff will have a negative impact on the consumers. The average household will have to pay an additional Rs1,000 per month for electricity. This will put a strain on the household budget and could lead to a decline in consumption.
The government has said that it is working on ways to reduce the cost of electricity. However, it is not clear when these measures will be implemented. In the meantime, the consumers will have to bear the brunt of the rising cost of electricity.
Here are some of the reasons why NEPRA has increased the power tariff:
- The rising cost of fuel. The cost of fuel has increased significantly in recent months due to the Russia-Ukraine war. This has led to an increase in the cost of electricity generation.
- The depreciation of the Pakistani rupee. The Pakistani rupee has depreciated significantly against the US dollar in recent months. This has made it more expensive for the government to import fuel and other raw materials for power generation.
- The increasing demand for electricity. The demand for electricity in Pakistan is increasing due to the growth of the economy and the increasing population. This has put a strain on the power grid and has led to an increase in the cost of electricity generation.
The increase in the power tariff is a major challenge for the government. The government is already facing a number of economic challenges, including a high fiscal deficit, a rising current account deficit, and a declining foreign exchange reserves. The increase in the power tariff will add to the government’s economic woes.
The government needs to take steps to reduce the cost of electricity. The government can do this by improving the efficiency of the power sector, reducing the reliance on imported fuel, and diversifying the sources of electricity generation. The government also needs to improve the governance of the power sector by reducing corruption and improving transparency. NEPRA jacks up power tariff