Islamabad: Pakistan's federal cabinet has greenlit an increase of PKR 5.72 per unit in the basic power tariff, as reported by ARY News. This hike, approved through a circulation summary, is set to be implemented by the National Electric Power Regulatory Authority (NEPRA) for uniform tariff application.

Details of the Tariff Adjustment
The decision, slated for fiscal year 2024-2025 starting from July 1, 2024, will see the average basic electricity tariff rise from PKR 29.78 to PKR 35.50 per unit. The Power Division will file an application with NEPRA to formalize the tariff adjustment.

Sectoral Challenges and Financial Impact
NEPRA's recent report highlighted significant challenges in Pakistan's power sector, revealing a staggering PKR 403 billion loss in the FY 2022-23. This shortfall was attributed to low recoveries and line losses among the country's power distribution companies, including K-Electric.

Regulatory Measures and Economic Implications
Earlier announcements by NEPRA indicated a nearly 20% increase in the national tariff to secure approximately PKR 3.8 trillion funding for the 10 ex-Wapda electricity distribution companies (Discos) in FY 2024-25. This move aims to bolster revenue by PKR 485 billion, aligning with government efforts to stabilize finances and secure international financial support.

Ensuring Regulatory Compliance
NEPRA clarified that varying rates of increase across consumer categories will be applied through cross-subsidies, ensuring compliance with overall revenue requirements while addressing sectoral disparities.

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