K-Electric, NEPRA, contractors, K-Electric Nepra

Govt to create more slabs for electricity consumers to reduce its subsidy burden

The federal government is working towards a plan to introduce more slabs for electricity consumers.

The aim behind the move seems to be to ensure implementation of targeted subsidies for budget year 2021-22, reported Geo News.

Special Assistant to the Prime Minister on Power Tabish Gauhar confirmed the development. He said the government is working towards carving out slabs which start from 200-300 units, 301-400 units, 401-500 units, 501-600 units and 601-700 units and so on”.

Explaining the rationale behind the move, Gauhar said currently, consumers who use 301 units and 699 units are receiving the same subsidy. He said this is taking a heavy toll on the government’s national exchequer. 

“The decision for more slabs will help create new categories of electricity tariffs for consumers and will help reduce the volume of subsidy too,” he said. 

Tabish said that the targeted subsidy regime in electricity tariff will be implemented in two phases and under the first phase, the tariff will not be raised. He said under the second phase, there will be a marginal increase in tariff.

However, if the new targeted subsidy regime is implemented, official sources say almost eight million consumers will be out of the subsidy net. At present, 22 million electricity consumers are getting the subsidy. However, it will be contained to 13.9 million consumers, and a hefty Rs42 billion can be saved annually in subsidy expenditure.

The report quotes sources as saying the 301-700 units slab will be divided into four slabs that include 301-400, 401-500, 501-600 and 601-700 and all power distribution companies (DISCOs) will be requesting the National Electric Power Regulatory Authority (Nepra) to make changes in the tariffs of the new category of electricity consumers, keeping in view the targeted subsidy. And all will be done after the decision about quantum of the amount to be budgeted as subsidy for next fiscal 2021-22.

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