Govt approves up to 51% hike in electricity tariffs for already overtaxed masses

The government on Thursday approved up to a 51% or Rs7.12 increase in the per-unit price of electricity from July. This latest hike adds to the already heavy tax burden shouldered by low-income households.

Low-income households will face a surge in electricity bills, with prices jumping between Rs3.95 and Rs7.12 per unit. 

This translates to a 14.3% to 51% increase, with the poorest consumers using less than 100 units monthly being hit the hardest.

At least Rs580 billion will be extracted from 32.5 million consumers, mainly low-income households, in the current fiscal year following the massive 51% increase in power tariffs.

Out of 32.5 million electricity consumers, around 26 million low-income households, who are already struggling with the sheer increase in prices after the budget, will be forced to bear this additional cost amid inefficient electricity policies by successive governments.

For the first time, the government will introduce fixed monthly charges ranging from Rs200 to Rs1,000 on residential electricity consumers.

The recent power hike was a crucial step Pakistan had to take to secure approval from the IMF for the next bail out package.

According to sources, the federal cabinet quietly approved the summary for the increase in electricity prices through circulation, instead of an open discussion in a cabinet meeting, and a notification for the increase in the price will be issued shortly.