Costly energy diminishes consumers’ purchasing power, warns Nepra

Amid ongoing engagement with the International Monetary Fund (IMF) for further electricity tariff reforms involving increases for residential and reductions for industrial consumers, the country’s power sector regulator, Nepra, has warned the government that its compulsions to pass on full costs coupled with historically highest inflationary spree in the country was diminishing the purchasing capacity of the consumers. Last week, the caretakers shared with the IMF its plans to further ‘rationalise’ electricity prices through a reduction in subsidies for residential and agricultural consumers and tariff cuts for the industries before newly elected government sets in to revive economic activities. In its latest annual report 2022-23, the National Electric Power Regulatory Authority (Nepra) highlighted that with a cumulative value exceeding Rs3.5 trillion in FY23, the power sector revenues constituted about 35pc of the country’s total budget which underscored the profound impact the power sector has on the nation’s economic landscape.