The federal government has decided to provide cash subsidies to low-income electricity consumers. The Public Accounts Committee of Parliament was informed that starting from 2024, subsidies will be disbursed in cash to deserving electricity consumers 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 receive up to 60% subsidy on their electricity bills. Over the past few years, the number of protected consumers has increased by 5 million. The committee was informed that the government is working on phasing out the “protected consumer” category, and in the future, eligibility for subsidized electricity will be determined based on BISP data.
The committee was also informed that negotiations are ongoing with the International Monetary Fund (IMF) to provide cheaper electricity to the industrial sector. The Secretary of the Power Division said that two proposals have been submitted to the IMF: the first suggests providing electricity to industries for the second shift at international rates, and the second proposes offering cheaper electricity to new industries, crypto, and data mining sectors. The IMF has not yet responded to these proposals. Upon IMF approval, the federal cabinet will be approached for final authorization.
Officials from the Central Power Purchasing Agency (CPPA) informed the committee that capacity payments stood at Rs141 billion in 2015, which surged to Rs1,400 billion in 2024. The main reason for this increase is the addition of new LNG and coal-based power plants. Imported coal has also contributed to the rising cost of electricity.
