Pakistan Ends Free Electricity Units for Officers: A Move Towards Fairness

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In an effort to address concerns about escalating electricity prices and promote fairness, the Pakistani government has decided to discontinue the provision of free electricity units to DISCO (Distribution Companies) officers. This decision was announced during a briefing with anchorpersons and bureau chiefs from various media outlets, where the difficulties faced by the people due to rising electricity prices were acknowledged by the minister.

Recognizing the need for a comprehensive approach, Caretaker Prime Minister Anwaar-ul-Haq Kakar called a high-level meeting to discuss the concerns related to electricity pricing. All stakeholders within the power sector will participate in this meeting to find effective solutions to the problem.

The Secretary of the Power Division informed the media about the different methodologies used by the National Electric Power Regulatory Authority (NEPRA) to determine electricity tariffs. He explained that electricity prices are subject to fluctuations based on the Consumer Price Index and are adjusted every three months to account for new power plants. Additionally, the upsurge in KIBOR rates and fuel price adjustments also impact electricity costs.

In the fiscal year 2023, the initial tariff was set at Rs 195 per dollar. However, due to the surge in the value of the dollar to Rs 284, this had to be revised. Similarly, the actual price range for RNLG (Regasified Liquefied Natural Gas) was between Rs 3,000 and Rs 3,800, despite the initial aim of setting it at Rs 3,183 per MMBTU. The price range for imported coal was between Rs 51,000 and Rs 61,000 per metric ton. He further disclosed that a significant amount of Rs 2 trillion would be allocated to capacity payments in the upcoming year.

The increase in electricity tariffs mainly affected consumers utilizing more than 400 units. For 63.5% of domestic consumers, the tariff remained unchanged. However, 31.6% of domestic consumers experienced an uptick of up to Rs 6.5 per unit, with a tariff of Rs 7.5 per unit being applied to only 4.9% of domestic consumers. The average tariff increase for domestic consumers stood at Rs 3.82.

Highlighting the progress made, it was mentioned that the highest recorded electricity tariff in July 2022 was Rs 31.02 per unit, which increased to only Rs 33.89 per unit by August 2023.

The decision to discontinue the provision of free electricity units to DISCO officers emphasizes that the burden is not being transferred to regular bill-paying individuals. It is a step towards ensuring fairness and eliminating preferential treatment.

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