Minister for Power Omar Ayub Khan on Saturday held a press conference to announce an increase in power and gas tariffs, while also assuring consumers that some relief has been provided alongside, most notably a freeze in the tariff for domestic users consuming 300 units of electricity.
"Domestic users who consume 300 units form 75 per cent of total consumers," noted the minister.
Ayub said that a separate subsidy has been kept aside by the government amounting to approximately Rs217bn, which will be given across different sectors, including domestic consumers.
"Alongside that, users who consume more than 300 — let's say around 400-500 units — for them we are slashing the increase proposed by Nepra by 50 per cent so that the burden on them, too, is reduced."
For such consumers, electricity will cost 75 paisas more, he said.
"This tariff will be valid for a period of 18 months, after which it will exit the system and the fuel adjustment charges which are added will continue," he added.
Ayub also announced that a subsidy of 54 per cent had been set for tubewell consumers.
"Despite the woeful situation we inherited from the PML-N, we are looking out for tubewell consumers and giving them protection," he said.
He also said that small businesses and general stores, which form 95 per cent of the commercial sector, will not face any sort of increase in power tariffs. Industrial users will see an increase of Rs1.80.
The prices will be effective from July 1.
Why the increased tariff?
Earlier, as he began the conference, the power minister explained the circumstances which led to an increase in the power tariff in the first place.
"Why did the increase take place? Rs190bn was determined by Nepra to cover the landmine which the PML-N government left behind, which we are struggling to remove and set aside.
"These are capacity charges of expensive [power] projects which were installed and the charges of which we have now been left to pay," he explained.
He said that the increased tariff on Nepra's recommendation will span 18 months, as a quarterly adjustment, and will leave the system after that time period.
"If this amount was imposed as an added tariff across all categories of consumers, then prices would have shot up dramatically."
He said that on the prime minister's special directives to counter this, special exemptions and relief measures had been decided which he had come to announce.