Govt to cushion domestic power users with Rs230b subsidy

Relief will be allocated in budget for consumers using up to 300 units per month

Zafar Bhutta May 25, 2019

ISLAMABAD: The government will allocate a subsidy of Rs230 billion in the upcoming budget to protect consumers using 300 or less units each month when it increases the electricity tariff in compliance with the International Monetary Fund (IMF) condition for a bailout package.

"The government has protected domestic consumers who are using up to 300 units per month. They account for 75% of the total consumers," Power Minister Omar Ayub Khan said at news conference on Friday.

He added that 95% commercial consumers had also been protected.

The minister said the National Electric Power Regulatory Authority (Nepra) had sought an increase in the electricity rate by Rs3.84 per unit but the Pakistan Tehreek-e-Insaf (PTI) government only raised it by Rs1.27 per unit.

"The same policy will continue after availing the IMF bailout package and the government will allocate a subsidy of Rs230 billion in the budget."

PM orders crackdown against power theft

About the increase in electricity rates for consumers falling in other categories, the minister said Nepra would determine the tariff.

Omar maintained that 80% of feeders in the country were exempted from loadshedding.

He said the government had collected Rs81 billion from power sector defaulters during the last eight months. "An amount of Rs10 billion has been collected from defaulting government departments," he added.

The minister pointed out that consumers in the erstwhile tribal areas were earlier supplied electricity for four hours only.

"Now, the Tribal Electric Supply Company (Tesco) is supplying power to them for 10 and a half hours and there is no power outage at Iftar and Sehri timings."

Omar maintained that the previous governments lacked the will to improve the power sector.

He added that the Pakistan Muslim League-Nawaz (PML-N) government had passed on a circular debt of Rs650 billion to the present government, including Rs450 billion piled up during the last year of its tenure to win the general elections.

"The PML-N government started providing electricity to loss-making feeders to win the elections that resulted in a circular debt of Rs450 billion."

Karachi plunges into darkness as power breakdown hits city

The minister also unveiled a plan for reducing the Rs450 billion circular debt.

"At present, it is Rs38 billion per month that would be reduced to Rs26 billion in June next year and Rs8 billion in June 2020.

Omar claimed that there would be zero circular debt by the end of December 2020.

"By next June, we will collect Rs100 billion from defaulters and Rs200 billion from those involved in power theft," he said adding that power losses had been reduced by 1.8%.

The minister also appealed to the people masses to join hands in the campaign against power theft at 1,500 feeders that account for 20% of their total number.

At present, the power sector is dependent on imported fuel by 60%. The minister announced increasing the share of electricity from local resources to 70% by 2030.

"The current share of renewable energy in the total mix is 4% that will be increased to 20% by 2025 and 30% by 2030," he said.

He added that the share of nuclear energy would be increased to 10%.

Omar said the government planned to introduce new meters that would also be installed at transformers to address the issue of power theft.

"The supply of electricity to any consumer involved in power theft will be suspended by pushing one button," he said.

"The Islamabad Electric Supply Company has floated tenders and the Gujranwala Electric Power Company is also going to invite bids to procure these meters."

The minister said 30,000 FIRs had been registered against those involved in power theft. No defaulters would be allowed to go scot-free and even the connections of the Presidency and PM House would be disconnected over defaulting bills.

Omar said power distribution companies were facing a shortage of staff for keeping a check on power theft.

He added that 950 to 1,000 employees would hired by power companies on the basis of merit.

"The government also plans to split the power companies."

The minister said the government would allow independent power producers, whose contracts were expiring, to search for new clients. "The government won't be bound to buy electricity from them."

Replying to question about offshore drilling, he said that government would continue its efforts to drill more wells.

After Omar's news conference, Prime Minister Imran Khan lauded the minister and his team's performance on Twitter telling them to "keep up the good work".

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