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Burdening masses: NEPRA raises basic electricity tariff by Rs7.9 per unit

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  • NEPRA cites increase in fuel prices, capacity cost as reasons behind increase in power tariff.
  • Basic power tariff has been raised by Rs.7.9078/kWh for the next fiscal year 2022-23.
  • Decision taken in line with IMF’s demand, power distribution companies’ requests.

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) Thursday raised the basic power tariff by Rs7.9078/kWh for the next fiscal year 2022-23 increasing the burden of inflation on the people of Pakistan.

The decision has been taken in line with the International Monetary Fund’s demands and the power distribution companies’ requests. Currently, the basic power tariff is Rs16.91 per unit and with an increase of Rs7.9078 per unit, it will be more than Rs24 per unit.

The NEPRA cited an increase in fuel prices, capacity cost and the impact of the devaluation of the Pakistani rupee as reasons behind the significant increase in power tariff.

According to a statement issued by the regulatory authority, the tariff has been determined for the fiscal year 2022-23.

The statement further mentioned that:

  • The energy purchase price was projected as Rs1,152 billion
  • Capacity charges including National Transmission and Dispatch Company (NTDC) and high-voltage, direct current (HVDC) electric power transmission cost is projected as Rs1,366 billion.
  • The total revenue requirement of XWDISCOs including DISCOs margin and prior year adjustment (PYA) is projected as Rs2,805 billion with projected sales of 113,001 GWh.
  • MEPCO, GEPCO, HESCO, SEPCO, QESCO, PESCO and TESCO have been allowed an investment of around Rs406 billion for their distribution investment programme for the five years.
  • XWDISCOs allowed transmission and distribution (T&D losses have been reduced from 13.46% to 11.70% for the FY23.

“The determined tariffs have been intimated to the federal government and the uniform tariff so determined by NEPRA after incorporating the amount of subsidy/surcharges, intimated by the Government of Pakistan, is forwarded for notification,” the statement read.

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ECC Convenes in Islamabad: Forum Sanctions Spa Agreement Between PSO and SOCAR Azerbaijan

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Pakistan State Oil and SOCAR Azerbaijan have signed a sale purchase agreement for the delivery of petroleum products, which has been approved by the Cabinet’s Economic Coordination Committee.

The Finance Minister Muhammad Aurangzeb chaired the ECC meeting in Islamabad, where the permission to this effect was granted.

The Ministry of Energy’s Circular Debt Management Plan for FY 2024–2025 was also authorized by the conference. Its goals are to improve financial sustainability and lower liabilities in the power industry.

The committee examined the situation with the increase in prices for chicken and pulses. In order to offer the general public with relief as soon as possible, it expressed worry about the situation and requested that the National Price Monitoring Committee keep an eye on it in cooperation with the Ministry of National Food Security and Research and the Provincial Administration.

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Pakistan has reduced its policy rate to an all-time high.

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There has been a significant decrease in the policy interest rate that Pakistan has implemented. The country’s central bank made the announcement on Monday that it will be lowering interest rates by 250 basis points, bringing them down to 15 percent. This was a record-breaking reduction in Pakistan’s policy rate, which was done with the intention of bolstering the economy, which had been struggling.

Following a significant decrease in Pakistan’s inflation rate, the central bank made this move. It was anticipated in a poll conducted by Reuters that policy rates would be reduced by 200 basis points. There was a forty percent increase in the country’s inflation rate in May 2023, however it has since decreased to seven point two percent in October. The Ministry of Finance anticipates that inflation will continue to decline, reaching a level of between 5.5 and 6.5 percent in the month of November.

Earlier, Pakistan had reduced the policy rate by 700 basis points over the course of four separate measures beginning in June of last year. The economy of Pakistan has been in a precarious situation for a considerable amount of time. The majority of economists are of the opinion that falling interest rates is essential in order to stimulate economic expansion.

By stating that the existing monetary policy will assist stabilize commodity prices and keep inflation between 5 and 7 percent, the State Bank of Pakistan expressed its support for a reduction in interest rates. In addition to contributing to the preservation of macroeconomic stability, it will also contribute to the achievement of economic growth on a sustainable basis.

Jameel Ahmad, the Governor of the Central Bank, informed analysts at a briefing that Pakistan’s bilateral partner countries have promised the International Monetary Fund (IMF) of continuing support for the duration of their current financial recovery program. This announcement was made in conjunction with the announcement of the policy rate decline.

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The stock market rises to all-time highs and crosses the 92,000-point mark.

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The primary index hit the crucial 92,000-point benchmark as the stock market soared to new all-time highs.

A significant increase was made by the hundred-index, which closed at 92,351 points after rising 414 points.

According to analysts, this increase is the result of a resurgence of investor confidence, which has been supported by strong mood in international markets and solid economic indications.

With predictions for more increase as market stability improves, the most recent surge highlights a robust recovery trend.

The market fell from previous record highs due to selling pressure, causing the Pakistan Stock Exchange to see a steep dip earlier today.

The benchmark 100-index ended the trading session down after originally rising 572 points to an all-time high of 92,514 points.

The market finished the day at 91,660 points, down 278 points, unable to hold the 92,000-point threshold after hitting spectacular highs.

Analysts point to investor profit-taking as a contributing factor in the decline, indicating a cautious attitude in the market following recent advances. The market is becoming more volatile, and investors are paying close attention to patterns.

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