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Govt to raise power tariff by Rs1.39 by November 1

The government to launch ‘seasonal electricity package’, said Azhar

SAMAA | - Posted: Oct 15, 2021 | Last Updated: 2 months ago
Posted: Oct 15, 2021 | Last Updated: 2 months ago

Federal Minister for Energy Hammad Azhar said on Friday that the government has proposed NEPRA to increase the power tariff as Pakistan’s circular debt soars.

“An increase of Rs1.39 a unit will be applicable in power tariff from November 1,” he said. “This will not be applicable on consumers using less than 200 units of electricity.”

The minister said that Pakistan was now self-sufficient in electricity. The government, he said, was targeting to increase the demand. “We introduced an industrial package last year which has been successful as we have seen a 15% increase in demand,” he added.

Demand for electricity, he said, had risen 6-7% since the peak-hour tariff was removed from the industrial sector.

The government is launching the ‘Seasonal Electricity Package’ under which consumers will get an extra discount for using extra units preceding their last year’s usage.

“We will also be introducing a new Quarterly Tariff Adjustment of 15 to 24 paisa from November 1, bringing the total increase to Rs1.1,” he said.

Azhar outlined measures taken to improve recoveries and losses in the power sector. “The circular debt was increasing at a rate of Rs450 billion when PTI formed the government,” he said.  “The rate of increase has now decreased to Rs150 billion.”

The government has closed old generation companies (gencos), while the National Electric Power Regulatory Authority (NEPRA) has also revised its target down from 15% to 13%.

“We have to increase the power tariff due to wrong decisions taken by the previous governments,” he added.

Worldwide gas crisis

Speaking about the shortage of gas, he said that the government has framed a new pricing mechanism to bill consumers for imported gas.

“We have decided to halt all ongoing schemes and provision of new connections of natural gas until legislation for the new mechanism is complete,” he said.

Earlier in the day, Azhar tweeted that the local gas reserves are depleting at a rate of 9pc per annum.

“The government does not have a legal mechanism to collect the costs of imported gas from consumers. We have forged a consensus on a new pricing mechanism but till its legislation, the government is halting all expansion in domestic gas networks.”

The new pricing mechanism, he said, will save gas companies from suffering huge losses.

Azhar said legislation on the matter was pending and until the system was introduced, the expansion of domestic gas networks had been halted.

“It is not just Pakistan, the entire world is facing a gas crisis,” he said. “Gas prices in European countries have increased by 500% in recent years.”

“Pakistan, however, did not face such an intense gas crisis.”

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