The Federal government has drawn up a Rs. 1,190 billion subsidy plan for the power industry,in the new federal budget.These subsidies exceed the Rs. 585 billion allotted for the current fiscal year by 104%, or Rs. 606 billion.
Important estimates from the government documents include:
Balochistan’s agricultural tube wells will cost Rs. 9.5 billion.
Rs. 276 billion for distribution companies’ (DISCOs’) pricing differentials
Rs. 65 billion in subsidies for the districts that combined
The tariff disparity for Karachi Electric is Rs. 74 billion.
The tariff disparity in Azad Jammu and Kashmir is about Rs. 108 billion.
The government has increased subsidies for the power industry despite the International Monetary Fund’s (IMF) repeated requests that policies be implemented to reduce circular debt and speed up the recovery of electricity expenses from all customer categories.Importantly, in order to assist the government in providing subsidies to domestic consumers, the industrial sector must pay higher tariffs.
