Karachi Faces Looming Electricity Tariff Hike, Sparking Public Outcry

Web DeskSeptember 12, 2023

Residents of Karachi are on edge as they await a substantial increase in electricity rates, potentially reaching up to Rs11.18 per unit, as part of quarterly adjustments. The National Electric Power Regulatory Authority (Nepra) held a public hearing regarding this proposal, titled ‘Motion for Recommendation of Consumer End Tariff for K-Electric and Application of Uniform Tariff for K-Electric Consumers by Way of Tariff Rationalization.’

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During the hearing, the Power Division advocated for an electricity tariff increase of up to Rs10.32 per unit for K-Electric consumers to establish a uniform tariff. However, after including all applicable taxes, this amounts to a significant Rs11.18 per unit increase.

The federal government had initially sought a cumulative tariff increase for different quarters, intending to recover these costs from Karachi’s consumers. It claimed that 40% of total consumers benefited from low tariff rates, while 63% of residential consumers fell into protected categories.

Nepra officials, however, expressed skepticism about the data presented and questioned the accuracy of the figure indicating 60% protected consumers. They raised concerns about the tariff policy’s impact on tax collection, economic growth, industrialization, employment, and overall economic stability.

The Nepra chairman emphasized that the regulator determines power tariffs in response to motions submitted by the government, and the government decides the rate. He urged the Power Division to address concerns over the tariff policy and explore ways to offset the cost increase’s impact.

Power Division officials explained that global factors had affected the power sector, contributing to the challenging times they are facing. They stressed that the government was actively working to address the economic crisis.

Amid these developments, the Karachi Electric (KE) Chief Financial Officer (CFO) revealed that 1.2 million out of 2.8 million residential consumers paid bills below Rs3,000 per month. Approximately 1.6 million consumers paid bills exceeding Rs3,000. The Nepra chairman requested a thorough analysis of these figures.

Industry representatives and business leaders expressed strong opposition to the tariff hike, asserting that it could lead to business closures and adversely affect industries, including steel. They called for a forensic audit of KE and suggested the possibility of multiple companies operating in Karachi to address electricity supply issues.

Jamaat-e-Islami’s Hafiz Naeemur Rehman criticized KE’s management for not fulfilling previous commitments to provide affordable electricity and urged the cancellation of KE’s license.

The impending electricity rate increase has stirred concerns among Karachi’s residents and sparked a contentious debate over the tariff policy’s implications for the city’s economy and residents.

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