Govt Moves to Withdraw Rs146 Billion Power Subsidy to Domestic Consumers

The federal government has decided to withdraw Rs146 billion subsidy being given to the electricity consumers apparently to meet a key demand of the International Monetary Fund (IMF).

The government is currently in talks with a visiting delegation of the IMF for securing a bailout package to stave off a possible balance of payment crisis.

The IMF has asked Pakistan to end power and other subsidies and carry out much needed structural reforms in the power sector in a bid to resolve the crippling circular debt crisis.

It seems the government has conceded to the Fund demand as mdia reports said the Power Ministry has asked the distribution companies to work out uniform power tariff for the power domestic consumers of different categories.

Following the directives, an application has been moved to the National Electric Power Regulatory Authority (NEPRA) for determination of tariff for domestic consumers of different categories.


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The tariff for the consumers consuming up to 50 units per month has been sought to be determined at Rs 2 per unit while the Rs5.7 tariff has been sought for consumers consuming up to 100 units power every month.

The power tariff for consumers using 100 to 200 units power every month has been recommended at Rs8.11 while tariff for the consumers using electricity from 200 to 300 unit per month has been sought at Rs 10.70 per unit.

The tariff for consumers using 300 to 700 units per month would go up to Rs17.07 per unit and consumers using 0ver Rs700 units of electricity per month would have to pay Rs20.70 for per unit power.

The petition for tariff determination will be heard by the regulator on Nov 26 this month.

        • Am I Pakistani? No. Do I live and work in Pakistan? Yes. Do I pay my electric bill every month? Yes. Do I look at my bill to make sure the DISCO is charging me correctly? EVERY month. What do I do here in Pakistan you may ask Jamil? Well funny you should ask. I work in the energy sector. I work with NTDC, MoE and various other agencies. NEPRA is a joke, they do nothing for Grid Code violations. PEPCO shouldn’t exist, it conflicts with NEPRA, NTDC and MoE. EVERY number for energy the NTDC and government reports on a daily consumption is fake. We have NO EQUIPMENT here to accurately record these totals. So they are made up to make whomever is the boss look good. How can you get numbers from a system that has no way of giving them? NOBODY in this country understands the energy sector (except maybe some clever crooks). Most foreign consultants are useless. They come here to help but are told by the agency they are here to help what to do. If they don’t do it the agency tells the donor to get rid of them and the donor does. Or they are just idiots that can’t work anywhere else. We hire retired people that CAUSED this mess as consultants. If they knew anything about energy they would have fixed this mess since it started off the rails in 2005. But they haven’t. Ask yourself how the “circular debt” went from nothing in 2005 to $5.5 billion in 2015 (10 years Jamil, 10 years), was cleared by IMF in 2015 and now 3 years later is more than it was after 10? What has changed? The people causing the theft found out the IMF would fix it and got bolder, stole more. These changes by the IMF are being done by bankers that know nothing of electricity. We are at a crossroads now and heading down the wrong path. It will only get worse. Bureaucrats are the problem. Hire REAL professionals to do this work. There are so many issues throughout the sector there is plenty to do.

          • Ok ,now you tell me your units and amount of then might understand much better and tell me which city you belong
            I belong from karachi here 195 units bill 1630 rupees

            • Okay you found your bill, good. I am in Islamabad. October was 969 units at the new rate of 21.22/unit or 20562.18 rupees. I see you pay 8.36/unit. In this environment it is hard to produce and ship energy for that cheap of a rate. The levelized tariff with all these “take or pay” obligations is twice that. You would not be happy paying twice for energy. Would make you conserve more electricity I am guessing, and pay the same. However, the people that just don’t pay are stealing from your government. The burden is somewhat relieved be the subsidy, but making people pay for something they commit to paying for when they sign up would probably remove the circular debt within a short time frame. It would definitely stop its increase. Remember, when they Government of Pakistan (Or better put you) borrows money from IMF to pay a debt your neighbors create, who is responsible to pay that back to IMF? Your Government (Or you as it were) though additional taxes or fees somewhere across the government services. Fees you get nothing for, but the thieves get free energy and you pay for yours directly AND theirs indirectly. Not cool. Don’t you agree? I have way less of an issue with the subsidy than I have with IMF asking for the wrong thing when they have the leverage to make change. Between the thieves and the cabal of others in the DICO/IPP/ETC there is little hope of anything without complete reform. All the rest is just smoke and mirrors. To distract the people from the real issues and try and blame the wrong people.

              • Producing of energy not much expensive they are lie , in india 100-300 unit price 3.70 rupees and 500 above 7.1 rupees…they just fool us…iitni mehngi bijli itni mehngi bijli

                • No it is not a lie. The cost of selling energy ANYWHERE is based on the cost of production, investment payback, operations and maintenance costs and profit on the sale. What you pay for fuel is subsidized by the government. What the IPPs pay for fuel is NOT. Every type of energy; coal, gas, HFO, wind, hydro, etc has its own costs. Hydel cost twice as much to build but operations costs are very low and fuel is free. Wind and solar have high maintenance costs, are heavily subsidized and fuel is free. Coal and gas pay moderate fuels costs have a lot of maintenance and on it goes for every type. We use a levelized tariff to represent the weighted average cost of all this energy. The main issue is theft and “Take or Pay” IPP contracts where and IPP get paid a significant capacity payment whether they generate energy or not. This cost is also introduced into the energy price mix and makes the levelized tariff higher. Paying a lot of money for nothing. The theft is from DISCOs themselves and consumers that don’t pay their bills. Want to get the cost of energy down, end “Take or Pay” contracting and theft. Unfortunately, with the take or pay contracts there is 40,000 MW of capacity that has commitment letters from the previous government. That will make this difficult moving forward.

                  • nice information thanks, but poor peoples how could pay the high rate electricity bills because they are already in their home budget crises and they are also don’t theft electricity and their consumption of electricity also in low like 1-150 units around

                    • You are welcome. I understand what you are saying and I disagree with the cutting of the subsidies too. It will not help anything as desired with paying debt. It is just shifting of money around. What’s the difference if government pays or you pay? Nothing, at least someone is paying. The money that is not paid should be collected. What is the people that paid all got together and protested in front of the peoples house who wasn’t paying? Instead of the DISCO. We I am sorry they will be raising your rate. Good Luck.

  • Will not do ANYTHING for circular debt (There is no “circular debt”, there is only theft that leads to nonpayment of vendors). This notification will just require honest people to pay more for energy. Says NOTHING about tampering with energy being a crime. Or going after theft. The revenue that is lost due to theft is a burden to ALL honest Pakistanis. When they rise up and go after the thieves, instead of blaming DISCOs or NTDC, or MOE, this problem will be solved. But no sooner. DISCO employees and police get attacked or even killed in some areas for looking into this. I wouldn’t go after thieves if this is what happens. If everyone paid for their energy this country could make MASSIVE strides towards development. Will not happen until then.

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