Electricity Bills to Skyrocket as New Tariff Slabs Applied from July 1
In Gujranwala, residents are bracing for a significant increase in electricity LESCO, FESCO, HESCO, PESCO, and GEPCO bills as new tariff slabs come into effect starting July 1, 2024. The Power Division has announced a hike of Rs5.72 in the basic GEPCO electricity tariff, setting the minimum rate for household electricity consumers at Rs23.73 per unit.
The federal government has submitted a tariff adjustment request to the National Electric Power Regulatory Authority (Nepra), with a public hearing scheduled for July 8. Regardless of Nepra’s official notification, the revised rates are already in force.
Gujranwala Household Electricity Consumers
For household electricity consumers, the new rates are as follows:
- Up to 100 units: Rs23.73 per unit
- 101 to 200 units: Rs25.53 per unit
- 201 to 300 units: Rs29.74 per unit
- 301 to 400 units: Rs32.98 per unit
- 401 to 500 units: Rs34.27 per unit
- 501 to 600 units: Rs35.64 per unit
- 601 to 700 units: Rs36.96 per unit
- Above 700 units: Rs41.69 per unit
For consumers using 200 units continuously over six months, the tariff will be Rs26.11 per unit.
GEPCO Commercial, Industrial, and Agricultural Consumers
Commercial consumers will face a rate of Rs41 per unit, while industrial consumers will pay Rs30 per GEPCO unit. Agricultural consumers benefit from a reduced rate capped at Rs22.85 per unit.
Government Subsidy and Impact on Electricity Rates Increases
To cushion the impact, the government has allocated a subsidy of Rs440 billion. This subsidy aims to limit the increase for 16.8 million (58%) poor household consumers to less than 2%, while more affluent consumers may see an average increase of 9% in their monthly bills.
The Power Division stated that the fixed charges were necessary due to the fixed 75% cost of the power sector. These measures are part of the government’s commitment to stabilizing the power sector and supporting domestic industries, with a reduction in industrial sector burdens by Rs150 billion.
Stakeholders are encouraged to participate in the Nepra public hearing to provide feedback before the official notification of the revised electricity prices is issued. Even the SNGPL bills and Wapda announcement underscore the government’s efforts to balance economic considerations with consumer affordability while ensuring sustainable development in the energy sector.
GEPCO Unit Price After Economic Crisis
The aftermath of the economic crisis has brought significant changes to the electricity pricing structure under the Gujranwala Electric Power Company (GEPCO). In response to the financial turmoil and rising operational costs, GEPCO has revised its unit prices to ensure the sustainability of the power sector and manage the economic strain.
GEPCO Revised Unit Prices for Household Consumers
The new tariff structure for household consumers is as follows:
- Up to 100 units: Rs23.73 per unit
- 101 to 200 units: Rs25.53 per unit
- 201 to 300 units: Rs29.74 per unit
- 301 to 400 units: Rs32.98 per unit
- 401 to 500 units: Rs34.27 per unit
- 501 to 600 units: Rs35.64 per unit
- 601 to 700 units: Rs36.96 per unit
- Above 700 units: Rs41.69 per unit
These changes reflect a necessary adjustment to cope with the increased cost of electricity production and distribution. For consumers using 200 units consistently over six months, the rate has been set at Rs26.11 per unit.
Impact on Non-Household Consumers
- Commercial consumers: Rs41 per unit
- Industrial consumers: Rs30 per unit
- Agricultural consumers: Rs22.85 per unit
Government Measures and Subsidies
To mitigate the impact on the public, the government has allocated a substantial subsidy of Rs440 billion. This subsidy aims to protect vulnerable households from bearing the full brunt of the price hikes. Specifically, it ensures that the tariff increase for 16.8 million (58%) poor household consumers is kept below 2%, while more affluent households might experience an average rise of about 9% in their monthly bills.
Rationale Behind the Increase
The decision to adjust the electricity prices comes amid a broader effort to stabilize the power sector. The fixed charges have been deemed necessary due to the fixed 75% cost structure of the sector. This adjustment also aims to reduce the financial burden on the industrial sector by Rs150 billion, thereby supporting domestic industries during the economic recovery.
Conclusion
The increase in GEPCO’s unit prices highlights the challenges faced by the energy sector in the wake of the economic crisis. While these adjustments are necessary for the sustainability of the power sector, the government has taken steps to cushion the impact on the most vulnerable consumers. As the economy stabilizes, there is hope for a gradual reduction in electricity rates, potentially decreasing by an average of 3% by January 2025 compared to June 2024 levels.