The National Electric Power Regulatory Authority (Nepra) has sanctioned a significant surcharge hike for Karachi Electric (KE) consumers following a request from the federal government. This increase, amounting to Rs1.52 per kWh, will result in an additional burden of approximately Rs24.50 billion for residents of Karachi. The hike is applicable for a year
from December 2023 to November 2024. Nepra’s approval, however, awaits the federal cabinet’s endorsement for official notification.
The decision to raise the tariff, which will not affect KE’s lifeline customers, is part of the federal government’s strategy to address financial obligations. This move aligns with the government’s broader efforts to manage the circular debt crisis and meet conditions set by the International Monetary Fund (IMF) for a crucial loan release.
The hike is expected to reduce the power and gas sectors’ circular debt, which has exceeded 4 per cent of Pakistan’s Gross Domestic Product.
Pakistan anticipates receiving $700 million soon to strengthen its foreign reserves and has committed to further increases in electricity and gas tariffs. Caretaker Minister for Finance Dr. Shamshad Akhtar indicated plans to hike gas prices in January next year as part of the IMF’s Stand-By Agreement Programme.
The aim is to reduce costs and enhance efficiency in the energy sector. The government’s concerted efforts in adjusting electricity and gas rates are crucial steps towards mitigating the burgeoning circular debt in the power and gas sectors.
