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Rs8 per unit rise in power tariff is expected

The increase will be implemented from July 1st, following IMF demand and power firms' requests.

The impact of inflation on customers is projected to grow as power tariffs are scheduled to rise by Rs8 per unit on July 1 this year.

The base power rate is currently Rs16 per unit. If the government follows the requests of the International Monetary Fund and the power distribution firms, it would be more than Rs24 per unit.

The IMF has requested that the government discontinue gasoline, energy, and food subsidies to release a $1 billion loan tranche. Fuel prices have risen by Rs30 per liter in response to the foreign lender’s demand.

According to reports, the rise in power rates would be in the form of basic tariffs, and the implementation will most likely be in phases.

According to the Ministry of Energy sources, ten electricity distribution firms have requested that the National Electric Power Regulatory Authority raise the rate, although the final decision rests with Nepra.

Nepra is likely to make a judgment this week, having finished hearings on these electricity distribution firms’ income obligations.

According to reports, following Nepra’s decision, the Power Division will be free to make the final move of raising the price of power, and the federal government will also decide on the targeted subsidy.

According to sources, power will grow more costly due to rising fuel prices, a strong currency, revolving credit, and corporate losses. However, the price hike may not be a one-time event. According to them, the country’s introductory electricity rate is currently more than Rs16.50 per unit.

If Nepra and the Ministry of Energy agree to the electricity distribution firms’ request and satisfy the IMF’s demand, the average basic tariff might surpass Rs24 per unit.

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