The federal government has decided to provide cash subsidies to low-income electricity consumers. This development has brought a wave of joy among consumers burdened by high electricity prices.
The Public Accounts Committee of Parliament was informed that starting in 2024, the government will provide cash subsidies to poor electricity consumers. The payments will be based on data from the Benazir Income Support Program (BISP).
The Secretary of the Power Division stated that 58% of electricity consumers use up to 200 units, and these consumers currently receive up to 60% subsidy on their electricity bills. Over the past few years, the number of protected consumers has increased by five million.
The committee was informed that the government is working to phase out the “protected consumers” category. In the future, the determination of protected electricity consumers will be based on BISP data.
The committee was also told that negotiations are ongoing with the IMF to provide cheaper electricity to the industrial sector.
The Secretary of the Power Division said that two proposals have been presented to the IMF for supplying additional low-cost electricity. The first proposal is to provide electricity for the second industrial shift at international rates. The second is to offer cheap electricity to new industries, cryptocurrency, and data mining operations. The IMF has not yet responded to these proposals. Once approved by the IMF, the proposals will be sent to the federal cabinet for final approval.
Officials from the Central Power Purchasing Agency (CPPA) informed the committee that in 2015, capacity payments were Rs. 141 billion. In 2024, these payments reached Rs. 1,400 billion. The main reason for this increase is the addition of new LNG and coal-based power plants. The use of imported coal has also raised electricity production costs.
