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Monday May 20, 2024

Power sector seeks Rs1.25tr subsidy in next fiscal

Power sector has demanded allocation of Rs1,250 billion subsidy for the upcoming budget 2024-25

By Our Correspondent
May 16, 2024
A representational image of high voltage electricity lines. — X/@MoWP15/File
A representational image of high voltage electricity lines. — X/@MoWP15/File

ISLAMABAD: Amid the approval of Rs23 billion additional subsidy for the AJK power consumers for the current fiscal year, the power sector has demanded allocation of Rs1,250 billion subsidy for the upcoming budget 2024-25.

If the rebasing of the electricity tariff is not done with the assent of Nepra, then the requirement of subsidy would go up in the next budget. So, the government is really in a catch-22 situation where the rebasing of tariffs will require an upsurge in the range of Rs7 to Rs8 per unit with effect from July 2024.

According to an official announcement made here on Wednesday, Federal Minister for Finance & Revenue, Senator Muhammad Aurangzeb presided over a meeting of the Economic Coordination Committee (ECC) of the Cabinet. Secretary Kashmir Affairs and Gilgit-Baltistan briefed the committee that during a high-level meeting held on Monday, Prime Minister Shehbaz Sharif had authorized an additional grant of Rs23 billion for the AJK government in the paramount national interest. The ECC approved the summary for “Provision of Rs23 billion as an additional grant to the AJK government through Technical Supplementary Grant as proposed by the Ministry of Kashmir Affairs and Gilgit-Baltistan.”

Separately, Finance Minister Aurangzeb chaired a meeting at the Finance Division to address the challenges of the industrial sector on energy. Key participants of the meeting were Minister for Power Sardar Awais Ahmad Khan Leghari, Minister for Petroleum Musadik Masood Malik, Minister for Commerce Jam Kamal Khan, Minister for Industries & Production Rana Tanveer Hussain, National Coordinator SIFC Major General Tabassum Habib, Deputy Chairman Planning Commission Jahanzeb Khan, Chairman APTMA Asif Inam and other prominent industrialists and federal secretaries concerned. The primary agenda was to discuss and devise solutions for addressing the power sector issues affecting the business community.

Chairman Nishat Chunian Group Shahzad Saleem presented a comprehensive overview of the challenges and proposed measures, with a focus on energy pricing. The industrial sector asked for reduced tariffs for export-oriented sectors which might not become feasible under the IMF programme. The finance minister appreciated the issues raised by the industry and assured that the government was committed to supporting the business community and would undertake all necessary measures to ensure a stable supply of power.