Electricity Tariff to Increase Again Under Govt’s New Reform Plan

The federal government has decided to increase the electricity tariffs under the new plan of subsidy reform.

Sources told ProPakistani that the Ministry of Energy (MoE) has proposed two new categories (protected or unprotected) in the reform plan for those consumers who will use electricity up to 200 units. Protected are those consumers whose consumption does not go beyond 200 units consistently for six months.

The electricity tariff for protected category consumers would be Rs. 3.95 up to 50 per unit, Rs. 7.74 for 1-100 per unit, and Rs. 10.06 for 101 to 200 units of electricity, and the government will directly give subsidies to this category of consumers (1 to 200 units) by allocating the amount in the annual budget.

The electricity tariff for unprotected category consumers would be Rs. 9.50 for 1-100 units, Rs. 10.36 for 101-200 units, and Rs. 12.62 for 201-300 units. In addition, the electricity tariff would be Rs. 17.19 for 401 to 500 units, Rs. 18.11 for 501 to 600, Rs. 18.75 for 601 to 700, and Rs. 22.22 for those who consume electricity more than 700 units.

Overall, the Ministry of Energy has proposed to enhance tariff from 0.08 to 0.95% for unprotected consumers using 1 to 700 units of electricity. Sources said that the Ministry of Energy has been working on three phases of subsidy reform.

The government has a plan to gradually reduce in total net subsidy for unprotected groups of residential consumers besides the removal of previous slab benefits (incremental block tariff). Sources said that ministry has also divided the agriculture consumers (Tubewells) slab into two categories based on simple criteria (plot size or motor capacity).

Meanwhile, Reforming subsidies to QESCO Tubewells by partially exchanging electricity subsidies to subsidize solarization and modernization of Tubewells and gradually decrease and eliminate subsidies as solarization progresses.

Sources said that government will integrate the CNIC data with NSER in order to provide electricity subsidy to the neediest based on their welfare score (not on consumption).

It is pertinent to note that the Economic Coordination Committee (ECC) on Thursday approved Power Sector Subsidies – Phase –II, which included removal of one slab benefit (Incremental block tariff) and incorporation of revised subsidy and inter-distribution companies tariff rationalization/cross-subsidies.

This plan would be presented to the federal cabinet meeting on Tuesday for final approval.

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