Subsidy withdrawal likely to increase power tariff prices in Pakistan

Pakistan government's decision to increase electricity tariff up to Rs0.95 per following withdrawal of Rs 20 billion subsidy has compounded the power-consumers problem.

Pakistan's federal government has filed a petition before National Electric Power Regulatory Authority (Nepra) to approve policy guidelines to withdraw Rs20 billion subsidy in the second phase of the subsidy reduction plan, across Express Tribune.

Earlier, Pakistan's government removed around 8 million power consumers from the subsidy net by reducing volume from 22 million to 13.9 million consumers. Now, in the second phase, the government is going to remove more consumers from the power subsidy network by withdrawing Rs20 billion per annum subsidy.

Further, The power regulator on Monday held a public hearing relating to the approval of the Policy Guidelines under Section 31 of the Regulation, Generation, Transmission and Distribution of Electric Power Act, 1997 for Retargeting of Power Sector Subsidies Phase-II.

Earlier, Nepra had pointed out that the provision of subsidy was the mandate of the Federal government.

Further, it said that the Energy Ministry (Power Division) had devised the subsidy reform programme, approved by the Economic Coordination Committee (ECC) of the Cabinet, which would be applied in three phases after approval from Nepra.

Earlier, the power regulator had approved the first phase and notified it with effect from October 1, 2021. Under this programme, the power regulator expanded the definition of lifeline consumers. It approved a new category of protected consumers having consumed up to 200 units consistently for six months, according to Express Tribune.

For the consumers using above 700 units, there would be no change and the base tariff would remain at Rs 22.22 per unit.

Under pressure from the international lenders, the Pakistan government plans to increase power tariff up to Rs0.95 per unit, taking the base power tariff to Rs18.75 per unit for some residential consumers, according to Express Tribune.

( With inputs from ANI )

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