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The National Electric Power Regulatory Authority (NEPRA) has announced the imposition of fixed charges on electricity consumers, ranging from Rs. 200 to Rs. 1,000 per month. This new structure is set to take effect on July 1, 2024, and represents a significant shift in the way electricity tariffs are calculated and applied in Pakistan.
Residential Consumers to Face New Charges
Residential consumers will see fixed charges based on their monthly electricity usage. The charges are tiered as follows:
- 301-400 units/month: Rs. 200/month
- 401-500 units/month: Rs. 400/month
- 501-600 units/month: Rs. 600/month
- 601-700 units/month: Rs. 800/month
- Above 700 units/month: Rs. 1,000/month
- Time-of-Use (ToU) meter users: Rs. 1,000/month
Increased Burden on Commercial and Industrial Consumers
Commercial and industrial consumers are also affected by the new fixed charges. For commercial users, those with a load less than 5kW will face a charge of Rs. 1,000 per month, while those with a load of 5kW and above will see their charges increased from Rs. 500 to Rs. 2,000 per month.
Industrial consumers are categorized based on their load and type of metering. The new charges are as follows:
- B1 category (up to 25kW, ToU metering): Rs. 1,000 per month
- B2 category (up to 500kW): increased from Rs. 500 to Rs. 2,000 per month
- B3 category (up to 5,000kW): increased from Rs. 460 to Rs. 2,000 per month
- B4 category (all loads): increased from Rs. 440 to Rs. 2,000 per month
Currently, the cost of electricity is heavily weighted towards variable charges, which account for 98% of revenue, with fixed charges making up only 2%. NEPRA’s new fixed charges aim to balance this by increasing the proportion of revenue derived from fixed charges.
Impact on Consumers and Revenue Generation
This change in tariff structure is expected to generate significant additional revenue for the power sector. For FY25, the government has projected revenue generation of over Rs. 3.763 trillion from these new charges. Additionally, NEPRA has set the new base tariff for FY25 at Rs. 35.50 per unit, up from Rs. 29.78 per unit in FY24, representing an increase in the base tariff of Rs. 5.72 per unit.
Looking ahead, the government plans to approach NEPRA for the implementation of a uniform tariff for FY25. This move is aimed at standardizing electricity costs across different consumer categories and regions, further simplifying the tariff structure.
NEPRA’s decision to impose fixed charges represents a strategic shift in Pakistan’s electricity tariff framework, aimed at stabilizing revenue and ensuring the sustainability of the power sector. While this move may result in higher monthly bills for consumers, it is expected to provide a more predictable and stable revenue stream for the industry, ultimately contributing to the country’s energy security and infrastructure development.
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