The government has notified a target of Rs. 140 billion for the power distribution companies in lieu of recovery for the sake of offsetting the effect of the industrial support package.
The government has announced to continue the support package worth Rs.3 per unit for the industrial consumers. It aims to fund this subsidy by securing efficiency gains in the power sector, which will be acquired by improving the bill collection, reducing the distributions losses and power theft.
Reportedly, a target of Rs. 60 billion was set out in the current fiscal year 2018-2019 in addition to the target of Rs.80 billion set out in the last financial year 2017-18 to offset the effect of the industrial support package.
As per the sources, the change in tariff will not go beyond the revenue requirements. Moreover, the government has also determined the average increase in tariff to be Rs.0.78 per unit over the last notified tariff. It further decided to set the rate of 7.5 US cents per unit for five zero-rated industries.
It is pertinent to mention here that the government is taking crucial measures to control power theft. Recently, Prime Minister Imran Khan has ordered a crackdown on power theft and line losses in Punjab.
A joint task force of the Power Division and the provincial government has also been formed in this regard. Same will be done in other provinces as well under PM’s initiative.
Power theft and line losses incur a hefty loss on national exchequer and also take a huge toll on common man’s pocket. Estimates regarding the non-recovery of bills were 10 percent i.e. Rs.114 billion in 2017-2018.
To increase recovery, the government has set out a target of 2 percent per year, which amounts to Rs. 23 billion by using technology and taking strict administrative measures.