HomePakistanGovt has to provide a subsidy of Rs 317b to keep power...

Govt has to provide a subsidy of Rs 317b to keep power tariff at current level

Islamabad – The government has to provide a subsidy of Rs 317 billion during FY 2020-21, to electricity consumers across Pakistan, to keep the electricity tariff at current level against the budgeted subsidy of Rs 140 billion.

The Cabinet Committee on Energy (CCOE) that met with Minister for Planning, Development and Special Initiatives Asad Umar in chair was also informed that the circular debt has reached Rs 2306 billion in November 2020, official source told The Nation.

The Power Division presented the latest circular debt situation and the projections.

The CCoE was briefed that the circular debt management plan is being implemented to minimize the circular debt buildup.

The CCOE was informed that the subsidy required based on current notification for the current fiscal is Rs 317 billion, however, the subsidy budgeted by Ministry of Finance is only Rs 140 billion.

The unbudgeted subsidy for the FY 2020-21 is Rs 177 billion, the source added. Incase the government wants to maintain the electricity prices at current level for the FY 2020-21 it has to pay additional un-budgeted subsidy of Rs 177 billion.Out of Rs 317 billion, the tariff differential subsidy is Rs 144 billion, QTA subsidy is Rs 28 billion, FATA Rs 18 billion, Industrial Support Package Rs 15 billion, Industrial Support Package-II Rs 22 billion, Zero Rated Rs 26 billion, AJ&K Rs 38 billion and K-Electric Rs 26 billion.

Similarly, the Committee was informed that the accumulation of circular debt was decreased to Rs 31 billion per month during July to November 2020 and the total accumulation during five months was Rs 155 billion against the accumulation of Rs 179 billion during the same period of last year. It was informed that the total circular debt was Rs 2306 billion till November 2020.

The Cabinet Committee on Energy discussed the proposal made by the Ministry of Information Technology and Telecommunication regarding the Electricity-Meterless Smart Metering System.

The CCOE directed the Power Division and M/o IT& Telecommunications to hold further deliberations on the proposed design and submit a joint proposal to the CCoE.

The Petroleum Division proposed setting up the committee for streamlining the process for Industrial gas connections in Balochistan Province. CCoE approved the proposed committee and directed that its recommendations be submitted to CCoE within one month. 

The meeting was attended by Adviser to Prime Minister on Finance Abdul Hafeez Sheikh, SAPM on Petroleum Nadeem Babar, Abdul Razak Dawood Adviser to the Prime Minister on Commerce, Textile, Industries, and Investment, and officials from various divisions.

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