Govt to increase electricity prices by Rs1.95 per unit

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Federal Minister for Power, Petroleum and Natural Resources Omar Ayub speaking during a press conference on Thursday, January 21, 2021, in Islamabad. — Photo: Screengrab via Geo News
  • Power Minister Omar Ayub says there will be an increase of Rs1.95 per unit in electricity prices now
  • Says the increase had to be made because of the policies of the previous governments
  • Says implementation of new rates will be finalised after official notification from Nepra


ISLAMABAD: Federal Minister for Power, Petroleum and Natural Resources Omar Ayub on Thursday announced that there will be an increase of Rs1.95 per unit in the cost of electricity, adding that owing to the policies of the previous government, this increase should realistically have been to the tune of Rs9 per unit.

The minister said that the new rates will be implemented after the official notification is issued by the National Electric Power Regulatory Authority (Nepra).

Minister Ayub was holding a press conference in Islamabad along with the Federal Minister for Planning, Development, and Special Initiatives Asad Umar and the Special Assistant on Power Tabish Gohar.

He said that the policies of the previous government were such that the industrial sector was compelled to pay whether they used electricity or not.

Read more: Omar Ayub says PM Imran Khan keen to resolve gas sector's issues

"We raised the issue of the previous government's policies in the cabinet, again and again, saying that they had "placed landmines" for the PTI government before leaving office. 

However, the incumbent government decided that it would "not burden the public with electricity bills any more," Ayub said. 

Ayub further said that PML-N set up "wrong factories" which used imported fuel. As a result, the ruling PTI had to inherit the burden of capacity payments from the previous government. 

"We [the PTI government] have paid Rs473 billion in subsidies during the ongoing financial crisis," Omar Ayub said. "I commend Prime Minister Imran Khan [and his policies] through which the government was able to pay this hefty amount."

The minister also said that the government employed "vigorous efforts to pay off the circular debt."

He said that due to the agreements inked by the PML-N government with the power sector, which were based on "bad intentions and corrupt practices", the increase in electricity tariff was Rs2.18 but the present government had decided to increase the rates by Rs 1.95 in per unit.

He added that due to the initiatives of the present government Rs1 to Rs2 per unit would be reduced in prices of electricity in upcoming years, adding that government had made agreements with power sectors as per law and regulations.

MoU signed with 53 IPPs

Speaking on the occasion, Special Assistant to the Prime Minister (SAPM) on Power Tabish Gohar said that the government signed Memoranda of Understanding (MoUs) with 53 independent power producers (IPPs), adding that the move will relieve the government of Rs836 billion in the next 20 years. 

"The amount of interest included in the power tariffs will be reduced," he said, adding that the supply of gas to all the industries related to power generation will be suspended. 

"We hope that there will be a reduction of Rs3 to Rs4 in the power tariffs in the next few years, especially for the common man," Tabish Gohar said. 

Country's economy is progressing

Speaking about PTI's economic policies, Federal Minister for Planning, Development, and Special Initiatives Asad Umar said that the government has been "consistently receiving good news regarding the economy for the last couple of months."

"Pakistan's economy is progressing and its exports are rapidly increasing because of the government's policies," he said. 

Asad Umar added that Pakistan is seeing a surge in its exports and that exports in December 2020 were significantly more as compared to December 2019.

"Overall, major industries are progressing because of which their electricity consumption has increased by 8%," he said. 

Read more: Power restoration to take a few more hours, says energy minister Omar Ayub Khan

Opposition reacts

Commenting on the electricity price hike, PML-N vice-president Maryam Nawaz said increasing the price of electricity is "the worst form of enmity with the masses."

"The government did not come to power through people's votes, that is why it is insensitive to people's needs," she said.

Sindh Information Minister Nasir Hussain Shah also objected to the move and said that the "government is trying to compensate its extravagant spending by increasing electricity prices and burdening the masses."

With input from Associated Press of Pakistan (APP).