Tuesday, July 23, 2024

Electricity up to 70% More Expensive from March onwards

Customers across Pakistan should expect heavily inflated electricity bills March onwards as multiple tariff charges applied by the Government of Pakistan come into effect.

  • Up to PKR 3.82/- per unit levied as Additional Surcharge (PHL) on power customers across Pakistan from 1st March 2023 to 30th June 2023. Agricultural and Non-TOU residential customers consuming up to 300 units will be charged a lower amount of PKR 0.43/unit while other customer categories will be charged PKR 3.82/unit. The Government has already submitted another application to continue this surcharge July onwards. Details of this are available on the NEPRA website: https://www.nepra.org.pk/tariff/Tariff/Ex-WAPDA%20DISCOS/2023/TRF-100%20XWDISCOS%20&%20KE%20REVIEW%20FILED%20BY%20FEDERAL%20GOVT.%2006-03-2023%204258-76.PDF
  • Under the Prime Minister Relief announcement last year, May, June and July 2022 Fuel Charge Adjustments of up to PKR 13.87 were deferred for Agricultural and Non-ToU Residential consumers who consumed up to 300 units of electricity across Pakistan. This deferred amount will now be collected from the customers who received this benefit, from March 2023 in eight instalments till October 2023. Monthly instalment amount varies from PKR 0.95 to PKR 3.0 per unit depending on customer category and will apply on the consumption of May, June and July 2022. The details of the recovery schedule are available on the NEPRA website: https://nepra.org.pk/tariff/Tariff/Ex-WAPDA%20DISCOS/2023/TRF-100%20MFPA%20FCA%20EX-WAPDA%20&%20KE%20AUG%20&%20SEP%202022%2009-03-2023%204933-43.PDF
  • Increased General Sales Tax from 17% to 18%. Taxes are applied as a percentage of the billed amount. In addition to the increased rate, total taxes payable will also increase if the billed value rises due to surcharge and FCA.
  • Weaker rupee and high dependency on imported fuel are increasing Fuel Charge Adjustments across Pakistan. FCA amounts are applied to bills after a rigorous scrutiny by the NEPRA and all decisions are published on the regulator’s website. If fuel costs reduce, power utilities will pass the benefit through to consumers.

With these hikes, an average customer can expect to pay up to PKR 39.8 per unit in March (inclusive of taxes) with the highest tariff charged to Time of Use consumers. If you were consuming 290 units in February 2023 and expect to consume the same in March, then your bill will inflate from PKR 8,172 to PKR 9,941 in just one month based purely on these cost revisions. To put things in perspective, a customer using 290 units paid merely PKR 4,790 in March 2022. Customers using over 700 units of electricity in a month and those who are billed according to Time of Use mode  will be much harder hit due to the proportionately higher electricity tariff applicable on them.

The tariff changes extend beyond Residential customers.

  • For Industrial customers, the government has withdrawn the Zero-Rated Industrial Support Package for five export-oriented industries from March 1, 2023 onwards.
  • For Agricultural customers, the Government of Pakistan has discontinued the Rs. 3.60/kwh subsidy from March 1, 2023, under the Kissan Package.

Amid these pressing times, responsible usage of electricity is the only recourse to keeping electricity bills affordable. Mitigate this increase in electricity bills by using electric appliances efficiently, for example: using air conditions at 26 degrees especially after peak hours, avoid operating heavy appliances like iron, water motors and microwaves during peak hours and try to switch to energy efficient equipment like LEDs and inverters where the opportunity presents itself.

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