The Power Division has asked for a supplementary grant of Rs136 billion in order to reduce the electricity price by Rs5 per unit, reported Business Recorder.
The reduction in power tariff is for both commercial and domestic consumers of Discos and K-Electric, it will be applicable on base rate and Fuel Charges Adjustment (FCA) for four months (March-June 2022) of the current fiscal year.
As per the Prime Minister’s relief package the FCA is to be capped at Rs3.0966 per unit for four months. The FCA amount over and above Rs3.0966 per unit will be absorbed by the federal government.Â
The relief package is to be applicable to commercial consumers and domestic non-ToU (Time of Use) consumers with a consumption upto 700 units per month. This excludes lifeline consumers.Â
The consumers eligible for the relief package will be provided the Rs5 per unit tariff reduction in their bills based on the applicable notified Schedule of Tariff (SoT).
According to sources the financial implication of subsidy required on the base rate and the capping of FCA at Rs3.0966 will be around Rs136 billion.
The relief package is based on estimated consumption patterns and FCA projections. Many factors will have implications on these projections and will impact the subsidy requirements under the package.
The power sector is facing liquidity problems due to the prevailing prices of imported fuel. Therefore cash flow requirements of the relief package need to be budgeted and released in a timely manner.
In its summary pertaining to the relief package Power Division has suggested proposals to the federal cabinet including the approval of a supplementary grant of Rs136 billion which also contains the additional cost of FCA.
