K-Electric (KE) consumers, already grappling with soaring commodity prices and high utility bills, are preparing for another potential financial blow: a surge in power rates by up to Rs11.18 per unit due to quarterly adjustments. During a recent public hearing held by the National Electric Power Regulatory Authority (NEPRA), the Power Division proposed this substantial increase to establish a uniform tariff for KE consumers. Yet, this figure incorporates all pertinent taxes on the projected rise, leading to a sharper increase than initially presented.
Simultaneously, skepticism has emerged regarding the Power Division’s data, which states that a significant portion of the consumer base was shielded through lower tariffs, with many falling into protected categories. NEPRA officials questioned the integrity of this data, suggesting that higher slabs might be applied unfairly and that the new tariff policy overlooks critical areas such as tax collection and economic growth, potentially hindering industrial development and employment rates.
Debates on Tariff Policy’s Impact on the Economy and Industry
At the hearing, the NEPRA chairman emphasized their concern about the potential adverse effects of the policy framework and tariff hikes on the economy. The chairman clarified NEPRA’s role as a responder to government motions rather than an initiator of rate increases, urging the Power Division to communicate these concerns to the federal government and explore ways to mitigate the tariff hike’s impact.
This debate comes amidst a broader economic slowdown, with NEPRA urging the government to consider the high electricity rates’ repercussions on the economy and ordinary citizens. In response, the Power Division cited uncontrollable global factors affecting the power sector and assured that multiple options were being considered to navigate the industry implications amidst the economic crisis.
Stakeholders Voice Strong Opposition to the Increase
The proposed rate increase has stirred vehement opposition from various sectors. Industry representatives warn that the substantial hike, amounting to a total of Rs18 per unit when considering previous increases, could bring industries to a halt. The Karachi Chamber of Commerce and Industry rejected the increase outright, fearing it would shut down businesses and calling for a forensic audit of KE.
Furthermore, Hafiz Naeemur Rehman of Jamaat-e-Islami criticized KE’s management for not honouring previous commitments to provide affordable electricity and demanded the cancellation of KE’s license. He advocated for allowing multiple companies to operate in Karachi and permitting consumers to source electricity directly from power plants, bypassing the costly power generated by KE. Rehman also urged a forensic audit of KE. He accused KE employees of being involved in power theft in the city, adding to the grievances of consumers already burdened by inflated bills.
Read: Intelligence Report Highlights Power Theft Crisis in Power Distribution Companies (DISCOs)
