IMF programme: Raise in base power tariff by Rs7-7.5/unit on the cards

ISLAMABAD: To ensure restoration of the IMF program, a massive increase in electricity base tariff by up to Rs7-7.50 per unit is on the cards within the next 2-3 weeks, which is to be enforced from July 1, 2022, top official sources told The News. “The current average base tariff stands at Rs16.64 per unit, which will go up to Rs24.14 per unit with the expected raise of Rs7-7.50 per unit.”

However, when contacted, Federal Minister for Power Division Khurram Dastgir Khan said that he was unable to tell about the exact volume of expected increase in base tariff as the exercise was underway and to this effect top officials of the ministry and NEPRA were engaged. Once the rebasing exercise is completed, then new base tariff will be determined and enforced from July 1, 2022 after the budget is announced.

Official sources said that the IMF has been asking for a long time a hike in electricity base tariff for 2022-23 as new power plants and transmission and distribution projects have been included in the national grid.

They said said that some of the new projects are now a part of the national grid, which include 878-km-long 660kV high voltage direct current (HVDC) transmission line, two nuclear power plants (k-2 and k-3), China Hub power plant, Engro power plant and RLNG-based power plant at Trimmu, Jhang, in Punjab and some more projects.

The base tariff is the average cost of electricity comprising the cost of power plants transmission and distribution system including fuel and O&M. It also includes the capacity payments of the power plants and to this effect, the current capacity payments stand at Rs800-850 billion per annum, which consumers pay in the tariff and in next budgetary year 2022-23, the capacity payments would increase up to Rs1.4 trillion per annum. “In the wake of new additions of projects into the system, the rebasing of electricity tariff is inevitable under which tariff will increase by up to Rs7.50 per unit.”