The federal cabinet on Wednesday approved through circulation a significant hike to the base tariff of electricity, fulfilling yet another prior condition of the International Monetary Fund (IMF) for securing a fresh bailout from the lender in the coming weeks.
The new rates—boosting the average base tariff from Rs. 29.78 to Rs. 35.5/unit—come into effect from July 1 and would apply to all consumers in the bills they receive at the end of the month. They stand to impose an additional burden of roughly Rs. 600 billion on consumers, with expectations of triggering another wave of inflation that the government has yet to prove it can manage.
Earlier, the National Electric Power Regulatory Authority (NEPRA) had sought an increase to the base electricity tariff by an average of Rs. 5.72/unit. Following the cabinet’s approval, the matter would be reverted to NEPRA for approval before being notified by the federal government.
Overall, the electricity prices have spiked in a range of Rs. 3.95-Rs. 7.12/unit for residential consumers, with lifeline consumers utilizing up to 100 units facing the brunt as their rates have been hiked by 51 percent, going from Rs. 7.74/unit to Rs. 11.69/unit. For consumers utilizing between 101 and 200 units, prices have similarly been raised by 41 percent, going from Rs. 10.06/unit to Rs. 14.16/unit.
In the unprotected category of household consumers, prices for those utilizing up to 100 units have been raised from Rs. 16.48/unit to Rs. 23.59/unit; from 101-200 units, prices have gone from Rs. 22.95/unit to Rs. 30.1/unit; from 201-300 units, prices hiked by Rs. 27.14/unit to Rs. 34.26/unit; from 301-400 units, prices are now Rs. 39.15/unit from Rs. 32.03/unit.
For consumers of 401-500 units, prices have been raised from Rs. 35.24/unit to Rs. 41.36/unit; for those utilizing 501-600 units, prices have gone from Rs. 36.66/unit to Rs. 42.78/unit; for 601-700 units, prices have increased from Rs. 37.8/unit to Rs. 43.92/unit; and for consumers of more than 700 units, base tariff would now cost Rs. 48.84/unit from Rs. 42.72/unit earlier.
The new inflationary pressures from high electricity tariffs are likely to witness civil unrest. Last year, nationwide protests broke out against excessive electricity bills during the summer, with scattered protests already underway this year.