In a significant move to address the burden faced by power consumers and promote tariff uniformity, the Pakistani government, under the leadership of Power Minister Khurram Dastgir, has revealed an extensive plan to allocate funds amounting to Rs315 billion. The objective of this allocation is to equalize the electricity tariffs in Karachi, served by K-Electric, with the rest of the country. Minister Dastgir expressed confidence that the International Monetary Fund (IMF) is supportive of the proposed budgeted subsidy, which is part of an overall power sector relief package worth Rs894 billion.
Budgeted Subsidy for Power Consumers Across Pakistan
To provide relief to power consumers across the country, excluding Karachi, the government plans to introduce a budgeted subsidy of Rs151 billion. This subsidy aims to alleviate the burden borne by customers due to line losses incurred by distribution companies (Discos) in various regions, including Lahore, Islamabad, Gujranwala, Faisalabad, Multan, Sukkur, Hyderabad, Quetta, and Peshawar. These funds will assist Discos in mitigating their line losses and resolving other pertinent issues.
Tariff Differential Subsidy for Karachi
In a bid to achieve tariff uniformity nationwide, the government has devised a comprehensive Rs315 billion package specifically tailored for Karachi. This package includes a tariff differential subsidy (TDS) to be provided to K-Electric. The TDS is intended to bring the cost of electricity in Karachi on par with the rest of the country. Minister Dastgir referred to this relief package as a form of cross-subsidy aimed at equalizing the electricity tariffs between Karachi and other regions.
Comprehensive Relief Package
The entire power sector relief package, scheduled to be implemented in the upcoming fiscal year, encompasses various components. In addition to the subsidies allocated to consumers and K-Electric, the package also includes substantial payments to Independent Power Producers (IPPs). The total worth of the relief package stands at Rs894 billion, signifying the government's commitment to address the challenges faced by the power sector comprehensively.
Government's Efforts and IMF Approval
Minister Dastgir highlighted that the government has been engaged in dialogue with the IMF regarding the subsidy and relief measures proposed for the power sector. He expressed satisfaction that the IMF has acknowledged and accepted the subsidies as part of the budgeted framework. Despite facing difficult circumstances, the government successfully averted default and ensured financial stability for Pakistan.
Power Generation and Load Shedding
The power minister also shared significant achievements in power generation, with an additional 5,000 megawatts added to the national grid. This includes contributions from projects such as Thar Coal, Karot Hydropower, K-3 nuclear power, and Punjab Thermal Power. While the country currently experiences no power shortfall, limited load shedding will continue in certain areas based on the severity of line losses. Minister Dastgir assured that efforts are underway to minimize load shedding duration and address high-loss feeders more effectively.
Conclusion
The Pakistani government's plan to equalize the electricity tariffs in Karachi with the rest of the country through an extensive subsidy package demonstrates its commitment to providing relief to power consumers and resolving longstanding disparities. The allocation of substantial funds reflects a proactive approach to tackling challenges within the power sector. Minister Dastgir's assurance regarding the IMF's acceptance of the proposed subsidies further reinforces the government's efforts to ensure financial stability.
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