Connect with us

Hi, what are you looking for?

Latest News
• TLP chief Saad Rizvi released from Lahore's Kot Lakhpat jail • Govt to table resolution on French envoy’s expulsion in NA today: Sheikh Rashid • PTI challenges ECP order allowing scrutiny of its accounts • NAB files reference against 15 govt officials over Gwadar land scam • Pakistan drops to 90th position in Inclusive Internet Index 2021, India @ 49th rank • SC asks FBR to provide report on Sarina Isa’s offshore properties • Pakistan urges Taliban to keep up with Afghan peace process • Work on CPEC projects progressing: Chinese envoy • NAB demands Nawaz’s seized properties auctioned • FM Pak urges UAE to ease visa restrictions on Pakistanis • Former KP IG Nasir Durrani passes away due to Covid • Pakistan bans travellers from India for 2 weeks owing to covid spread • Singer Ali Azmat tests positive for covid • Foreign direct investment falls by 35% in 9 months • US invites Pakistan to virtual climate summit • NASA helicopter carries out take-off, landing on Mars • 150,000 Russian troops deployed near Ukraine’s borders: EU • UAE extends $2bn loan repayment date for Pakistan
News Alert
    • Covid Updates: 5,445 cases reported while 137 deaths recorded in last 24 hrs
    • Currently, 82,298 cases are active in the country
    • The death toll reaches 16,453 in Pakistan
    • 4,286 people recovered in last 24 hrs
    • The current positivity rate is 8.01% in the country 
    • India recorded 272,000 cases and 1619 deaths on Monday alone
    • New Delhi is under lockdown after recent spike in Covid spread across the country


Pakistan to Reduce Electricity subsidy: ECC

Reforms are under way, in initial phase, subsidy for 8m consumers will be abolished

Number of consumers taking benefit of subsidised tariffs will be limited to 13.9m as compared to current 22 million consumers and around Rs42b would be saved per year.

ISLAMABAD: Policymakers have approved power subsidy reform measures under which subsidy for 8 million consumers will come to an end in the first phase.

As part of reforms, the government will increase the ceiling for lifeline consumers from 50 units to 100 units per month.

At present, 22 million electricity consumers are getting subsidy. However, it will be limited to 13.9 million consumers, which will be only through the Ehsaas social welfare programme, following the implementation of reforms.

The Economic Coordination Committee (ECC), in its meeting held last week, was told that ideally electricity subsidy for residential consumers should be restricted to the lowest socio-economic class.

It would be possible to use the Ehsaas socio-economic registry for the provision of power subsidy after the completion of a survey and linking residential electricity meters with the Computerised National Identity Cards (CNICs), the committee was told.

Until then, the electricity consumption could be used as a gauge to determine the socio-economic status of consumers and their eligibility for subsidy. The model had been in use in Pakistan’s power sector for a long time. Electricity was provided at subsidised rates to the users consuming up to 300 units per month.

The current power subsidy and tariff structure, though aimed at providing relief to the low-end consumers, has various elements which make the subsidy untargeted.

These include no exclusion criteria for the most subsidised slabs, consequently consumers with a large asset/ income base become eligible for subsidised electricity during winter months when consumption drops to low levels.

Apart from that, the Incremental Block Tariff structure allows each consumer to take benefit of tariff rates of previous slabs.

The ECC was informed that it was decided in a meeting chaired by Prime Minister Imran Khan on September 16, 2020 that “Power and Finance Divisions as well as Ehsaas will work out details of targeted subsidy for electricity consumers and then move a summary to the ECC for decision on tariff revision.”

Subsequently, in a meeting on February 10, 2021, a two-phase subsidy reform programme was presented to the prime minister and was approved in principle.

In order to make the subsidy for residential consumers more targeted, it was proposed that the exclusion criteria should be applied to the slabs below 300 units per month so that ineligible consumers may not take benefit of the significantly subsidised tariffs for these slabs.

It was proposed that the condition of maximum consumption in the previous 12 months not exceeding the ceiling of each of these slabs may be applied.

It was estimated that under that condition, the number of consumers taking benefit of subsidised tariffs would be limited to 13.9 million as compared to the current 22 million consumers and around Rs42 billion would be saved per year in subsidy expenditure.

At present, lifeline consumers are defined as those whose electricity consumption does not exceed 50 units in a month. They are not only charged the lowest tariff of Rs3.95 per unit but also fuel cost adjustment, financial cost surcharge and Neelum Jhelum surcharge are not applied to them.

It was proposed that the definition of lifeline consumers may be revised to include those whose monthly consumption does not exceed 100 units. No tariff reduction was proposed for the consumers falling in the expanded slab, but they would be protected from surcharges in future.

The Power Division submitted the following proposals in a summary for ECC’s consideration and approval as the first phase of subsidy reforms:

The expanded definition of lifeline consumers will include residential non-Time of Use (ToU) consumers having maximum last 12 (or six)-month and current month consumption of 100 units. Two rates for 50 and 100 units will continue.

Residential non-ToU consumers having maximum last 12 (or six)-month consumption of 100, 200 or 300 units will be eligible for subsidised rates of the relevant slab.

Residential non-ToU consumers having maximum last 12 (or six)-month consumption of 200 or 300 units (subject to analysis), currently being billed at subsidised rates in low consumption months, will be billed as per a mechanism designed to ensure that ineligible consumers don’t receive high subsidy amounts and the price shock to such consumers is minimised.

Tariff slab for 301-700 units per month will be broken into two or more slabs, with the lower in these slabs charged at a lower rate.

The Power Division will complete an analysis on the basis of above principles and submit specific proposals to the ECC by March 31, 2021. Such changes may be implemented with effect from June 1, 2021.

The ECC approved the summary titled “Re-targeting of Power Sector Subsidies Phase-I”.

Written By

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *




India made astonishing record of Covid surge on Wednesday crowds of pilgrims gathered for a religious festival despite oxygen shortages and strict curbs in...


At $2.7bn, the remittances were up 20% compared to February and 43% compared to March 20. Total $21.5bn during July-March FY21, up 26% over...


Pakistani actress Sara Khan, wife of singer Falak Shabir has been admitted to hospital due to poor health. Husband, Falak Shabir turned to social...


KARACHI: Unlike IMF & World Bank’s Pakistan growth forecast below 2%, Pakistan’s central bank has expressed confidence that the country’s economy would grow by...

Copyright © 2021 The Truth International