Mohammad Arshad Islamabad
The government has formally decided to gradually withdraw subsidies on power consumers.
In this regard, Finance Division has recommended the Power Division to gradually withdraw subsidy being granted to electricity consumers on the consumption of 201 to 300 units.
The Finance Division has also recommended the Power Division to start implementing on this project.
At present consumers using power 201 to 300 units per month are being granted Rs 60 billion subsidy annually, but according to the Finance Division, this subsidy is being abused because people living in posh areas are also beenefitting from this facility.
This subsidy is meat to the poor segment of the society but a large number of beneficiaries of this susidy don’t fall in the specified income group.
According to well placed sources, the government with the help of relevant departments is collecting the data of consumers on the basis of their CNICs and phone numbers to ascertain their actual income group.
With the hepl of this data the government will ensure targetted subsidy on electricity bills and other utilities.
In this regard, the federal cabinet approved an increase of Rs 5.65 per unit a few days back.
The federal cabinet also allowed the government to promulgate a presidential and then the government will increase Rs 5.65 per unit.
The federal cabinet also allowed to government to promulgate another ordinance to amend the NEPRA Act which would empower the government to levy 10% surcharge on every electricity bill to enhance revenue.
According to well placed sources, Rs 5.65 per unit price of electricity will be raised in six phases and federal cabinet has already granted approval for this process through a circulation summary.
The purpose of this increase in electricity price is to reduce the tune of mounting circular debt.
Power tariff will be increased twice through tariff adjustments in a year and four quarterly adjustments during this year.
With the addtion of ten percent surcharge, price of per unit electricity will also be enhanced by Rs 7 and it will add an additionnal burden of Rs 934 billion on the cosumers.
The government increased Rs 1.95 per unit power price last month on account of tariff adjustment. With the addtion of additional increase the per unit price will be increased by Rs 8.95.