Islamabad: The federal government is mulling an increase in electricity tariff of up to Rs 5 per unit through rebasing to be implemented from July 1, 2023, as Power Purchase Price (PPP) payments will touch over Rs 3 trillion during FY 2023-24, well-informed sources in Power Division told republic policy.
The proposed rebasing to raise tariff between Rs 4 -5 per unit from the next fiscal year is based on different assumptions, including further Rupee devaluation, which according to one hypothesis, will touch Rs 382/ $ during the last quarter of FY 2023-24 against the belief of Rs 180 or Rs 190/$ during the outgoing fiscal year. Discos have also sought over Rs 600 billion in revenue requirements for FY 2023-24.
The country’s circular debt has already touched Rs 2.5 trillion due to the massive devaluation of Pak Rupee, less recovery by power Distribution Companies (Discos), and failure to reduce losses as per Nepra’s targets. The lenders are dissatisfied with the performance of the country’s power sector.
During the current fiscal year, the coalition government has paid an amount of about Rs 300 billion to reduce circular debt, which is growing by Rs 500 billion per annum, i.e., Rs 41.66 billion per month.
According to sources, National Electric Power Regulatory Authority (Nepra) has informed the Power Division that it is in the process of finalizing rebasing of consumer-end tariff for the FY 2023-23 for Discos. One of the significant components of tariff is the PPP which constitutes over 90% of the overall revenue requirement of Discos.
By adopting a forward-looking approach, the Authority determines PPP references each year, keeping in view the ground realities. These references remain applicable unless new connections are notified.
