Finance Ministry to Cut Energy Subsidies in Budget 2023-24

The Ministry of Energy will not get a subsidy of more than Rs. 1 trillion in the fiscal budget 2023-24, Finance Ministry sources told ProPakistani.

In the upcoming budget, Rs. 980 billion will be allocated to the Energy Ministry as a subsidy. This allocation includes Rs. 262 billion for making payments to Independent Power Producers (IPPs), while another Rs. 298 billion for tariff differential and payments for K-Electric (KE).

For players operating through KE’s industrial support package, the government will provide Rs. 7 billion, as per sources.

The Ministry of Finance will provide Rs. 150 billion in tariff differentials for distribution companies (DISCOs) and separately Rs. 80 billion in the form of tariff subsidies for Azad Jammu and Kashmir.

Sources said the ministry has decided to set aside Rs. 10 billion as a hedge for providing support against shortfalls faced by agri players in the Balochistan province. They said the cash would be provided as a subsidy for tube wells for agriculture in the region.

The budget 2023-24 is expected to offer some relief to inhabitants of the erstwhile FATA region as well. Sources added that Rs. 25 billion will be provided in the form of an electricity subsidy for the region.

Furthermore, Rs. 82 billion will be allocated to Power Holding Private Limited (PHPL) so that the company is able to fulfill its debt repayment commitments.

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