NEPRA allowed Rs1.39 increase in tariff from Nov: Hammad


Says govt planning to change law to provide LNG to domestic consumers
Minister for Energy Hammad Azhar has said that the government has allowed National Electric Power Regulatory Authority (NEPRA) to increase electricity tariff by Rs1.39 per unit from November 2021.
Addressing a press conference along with Minister of State for Information and Broadcasting Farrukh Habib on Friday, Hammad Azhar said that NEPRA had recommended an increase of Rs3.5 per unit in March.
The energy minister said that 46 percent of domestic consumers using less than 200 units will not be affected by this increase. He said the rise in tariff will also not have any impact on the industrial package.
He said the government has to increase the electricity tariff because of the costly powerhouses installed by the last government. “We now have the capacity to generate enough electricity, therefore we want to increase the demand. We introduced an industrial package last year which has been successful as we have seen a 15% increase in demand,” the minister said.
“Meanwhile, we have also seen a 6-7% increase in the demand for electricity as the peak hours for the industrial sector have been removed.”
The minister said that keeping in view the success of this package, the government decided to introduce another package — known as the seasonal electricity package — under which consumers who use an extra unit compared to their last year’s usage will get an extra discount.
Shedding light on further steps, he said that the government has closed old generation companies (gencos), while the National Electric Power Regulatory Authority (NEPRA) has also revised its target from 15% to 13%.
“Despite all this, there is a difference between Rs1.5 to Rs2 in the rate at which the government is purchasing and selling electricity, this is the reason behind surging circular debt,” he said. “A major chunk of circular debt is because of capacity payments. And because of the wrong decisions taken by the previous governments, we have to increase the power tariff,” he said, adding that the government had proposed to NEPRA that the power tariff should be increased by Rs1.49 per unit.
Azhar said another major issue the country is facing is related to the shortage of gas. “Currently, the entire world is facing a gas crisis — whether it’s a developed country or an under-developed country — because the supply of gas has been affected due to Covid-19, while prices also surged,” he added
“Pakistan, however, did not face such an intense gas crisis,” the minister said, adding that the government is working on the North-South Gas Pipeline Project with Russia. “We are also planning to change the law to provide LNG to domestic consumers,” he said. “The government will not curtail demand without ensuring proper gas supply.” He continued, “In order to resolve the gas crisis issue, we are blocking all ongoing and future gas schemes.”
Earlier in a tweet, the minister said: “Local gas reserves are depleting at a rate of 9% per annum.” The government does not have a legal mechanism to collect costs of imported gas from consumers, he said, adding, “We have forged a consensus on a new pricing mechanism but till its legislation, the government is halting all expansion in domestic gas networks.”
“Currently, the provision of piped gas to domestic households is 28% of all households,” he tweeted.