The federal government plans to subsidize K-Electric’s electricity tariff by approximately Rs9.20 per unit using taxpayer funds. This decision follows a recent Nepra hearing where K-Electric disclosed an estimated average tariff of Rs44.69 per unit for the next seven years, up from Rs34 per unit under the previous tariff.
During the hearing, K-Electric emphasized the need for increased local bank borrowing limits to avoid relying on expensive foreign debt. Which would further raise costs for consumers. The new tariff structure includes Rs31.42 per unit for energy and capacity payments, Rs3.48 for transmission charges, Rs3.84 for distribution charges, and Rs5.96 for supply tariffs.
Nepra’s approval of a national average tariff of Rs35.50 per unit for the upcoming fiscal year underscores the government’s commitment to maintain uniform electricity pricing nationwide. The differential between K-Electric’s tariff and the national average will be covered by the government through tariff differential subsidies (TDS).
Consumer groups in Karachi voiced concerns over frequent power outages and service quality issues by K-Electric. Contrasting it with better performance from public-sector distribution companies. In response, K-Electric highlighted its efforts in reducing system losses over the years. Which they claim helped prevent an additional Rs17 per unit increase in average tariffs.
