The Power Price Hike: An Overview
In a bid to secure a revenue requirement of about Rs4 trillion for power companies in FY25, the government has formally sought a 25% increase in the national electricity tariff starting July 1, 2025. The request, submitted by the Central Power Purchasing Agency (CPPA) to Nepra, outlines a proposed increase of Rs4.40 to Rs6.51 per unit in the overall power purchase price (PPP) for the upcoming fiscal year.
With estimates suggesting a demand growth of 3-5%, the CPPA has presented various scenarios for electricity sales in FY25, ranging from 131,000 to 139,000 gigawatt hours. The proposed tariff increase includes a significant upsurge in energy purchase price and capacity payment price, along with additional charges for transmission and distribution margins.
This move, aimed at managing circular debt and securing a bailout package from the IMF, has been developed in consultation with various industry stakeholders and organizations. The decision reflects a collective effort to address the growing financial challenges in the power sector.
As we look towards a future of increased energy costs, it becomes imperative for all stakeholders to work together towards building a sustainable and efficient power infrastructure for Pakistan.
Published in Dawn, May 16th, 2024