Karachiites will pay an additional Rs 1.52 in surcharge

• The federal cabinet is necessary to notify it.
• It will be collected for a period of one year.
• The federal government had requested an increase.

ISLAMABAD: On the request of the federal government, the National Electricity Regulatory Authority (Nepra) on Thursday approved a hike of Rs 1.52 crore on consumers of Karachi Electric (KE), which will translate into a whopping Rs 24.50 billion surcharge on the Karachiites.

The sole electricity supplier of Pakistan’s largest city — by population — will be able to collect this surcharge for a period of one year, from December 2023 to November 2024, according to Nepra.

Although the energy regulator has approved the tariff hike, the federal cabinet is required to notify it. The increase will not affect customers of the dedicated energy provider.

“In view of the aforesaid discussion, the reply of the Ministry of Finance and the fact that the proposal has been submitted under Section 3 1(8) of the NEPRA Act, which empowers the Federal Government to levy a surcharge and is levied for the fulfillment of the financial liability of the Federal Government, the Authority has decided to allow the said proposal i.e. recovery of Rs. 1.52/kWh from K-Electric consumers, excluding lifeline, for a period of twelve months from December 2023 to November 2024,” Nepra said.

The government has taken several steps to raise gas and electricity tariffs in a bid to curb cyclical debt and satisfy the International Monetary Fund (IMF) for releasing a much-needed loan under a short-term program.

Pakistan is set to receive $700 million soon, which will boost the country’s struggling foreign exchange reserves and help it pay off debts and in terms of imports.

Committing to further hike in electricity and gas tariffs, caretaker finance minister Dr Shamshad Akhtar said the caretaker government plans to hike gas prices in January next year to address the cyclical debt issue.

Addressing a press conference here at Q Block last week, she said that under the IMF’s Stand-By Agreement (SBA) Programme, it has been agreed to reduce costs in the energy sector and restore efficiency in the sector.

“The cyclical debt of the electricity and natural gas sectors has exceeded 4% of the Gross Domestic Product. Urgent action is required to collapse. We have started work on this matter and electricity and gas prices have been adjusted accordingly,” he added.