Muhammad Mudassar

The household sector is the largest consumer of electricity in Pakistan, consuming 47 percent of the total electricity produced. The Russian-Ukraine crisis has caused a ripple effect in the world energy market, as the world’s largest energy producer has been forced off the market due to the economic sanctions. The surge in the international energy market has caused an increase in the energy price in Pakistan, as it has huge dependance on the imported fuel. 

According to the Trade Development Authority of Pakistan (TDAP), Pakistan’s total demand is around 19 million barrels of which 50 percent is imported. The oil import bill increased by 95.9 percent to US$17.03 billion during the 10 months (July-April) of FY2022 compared to US$8.69 billion during the same period last year.

The surge in the oil import bill is attributed to an increase in value as well as demand. The import of petroleum products went up by 121.15 percent in value and 24.18 percent in quantity.The government has increased the power base tariff by Rs7.9 per unit except for lifeline consumers (consuming up to 100 units) due to the fact that a large proportion of electricity is produced using the imported fuel.

The base tariff for those consuming 101-200 units has increased by Rs7.21 per unit in phases to Rs18.95, while the rate for the consumers using 201-300 units per month has gone up by Rs8.31 to Rs22.14 per unit. The rate for the consumers using 301-400 units has risen by Rs4.30 per unit to Rs25.53, while the rate for those consuming 401-500 units has gone up by Rs6.51 per unit to Rs27.74.

Likewise, the base rate for 501-600 units has been increased to Rs29.16 per unit, up by Rs7.93. The base rate for 601–700-unit is fixed at Rs30.30 per unit, showing an increase of Rs8.97 per unit. The base tariff for consumption above 700 units per month has gone up to Rs35.22 per unit, with an increase of Rs11 per unit. The base rate for the Time of Use (TOU) meters would go up by Rs10.06 to Rs34.39 for peak consumption hours and Rs28.07 per unit for off-peak hours.

Talking to WealthPK, Muhammad Faisal, a consumer, revealed that he consumed only 208 units in July 2022 and got a bill of Rs7,193 which was much higher than the previous months. Faisal said he got a bill of Rs3,826 for consuming the same number of units in October 2021.

Moreover, the government has changed the bill calculation policy for the household sector. Previously, if someone consumed 400 units, the base tariff was calculated through different rates. For example, the first 1-100 units’ rate was different from 101 to 200 units. However, now if someone uses 400 units, the per unit rate will be unanimous.

It is imperative that all oil refineries increase their capacity which is currently operating at 60% of their capacity. Renewable energy sources should also be prioritized by the government which will help generate cheap and environment-friendly electricity.

Credit: Independent News Pakistan-WealthPak