Rs733 billion subsidy for power consumers

ISLAMABAD: The Nawaz government has, in the five budgetary years, extended the subsidy of Rs733 billion to electricity consumers as against the Rs01 trillion the PPP government provided in its five years’ time.

The budget documents for five financial years under Nawaz government show that the subsidy to electricity consumers has eaten up Rs733 billion.

However, for the year 2017-18, the government has slightly reduced its allocation as subsidy to Rs118.100 billion for the electricity consumers in 2017-18 from actual subsidy of Rs118 billion in Pakistan which include the consumers of Pakistan Electric Power Company (Pepco) and K Electric.

The government has allocated Rs102.500 billion subsidy for Pepco electricity consumers as against the actual subsidy of Rs102.580 given in the outgoing fiscal 2016-17. However, for K Electric consumers, the government has projected Rs15.500 billion against the revised target of Rs15.420 billion.

The documents show that in the head of Inter-disco tariff differential, the amount of Rs91 has been consumed in the outgoing fiscal against the budget target of Rs60 billion. However, for next financial year 2017-18, the government has earmarked the amount of Rs60 billion again for the subsidy under the same head.

The Rs105.500 billion subsidy for Pepco consumers also includes Rs8.5 billion for tariff differential of Agriculture tube-wells, Rs10 billion against the receivables from FTAT for Pepco and Rs4 billion has been earmarked for payment of arrears under the head of inter-disco tariff differential and Rs15 billion for powers sector reforms in public sector entities.

And the subsidy of Rs15.500 billion that has been projected for K Electric consumers included the Rs15 billion amount that has been projected as tariff differential subsidy and Rs500 million for agriculture tube-wells in Balochistan.

However, the total subsidy for electricity consumers and poor segment of society under the head of food has decreased to Rs138.846 billion from the revised target of Rs168.9 billion showing that the poorest of the poor will feel the head in next fiscal year 2017-18.

Under the head of subsidy to Utility Store Corporation, however, has also reduced by 42 percent to Rs4 billion against the revised subsidy of Rs7 billion. The Rs4 billion subsidy include Rs1.5 billion for Ramazan package and Rs2 billion for payment of sugar arrears in 2017-18.

However, Rs500 million has been earmarked for the subsidised rates of pulses, rice and tea at outlets of the Utility Stores Corporations. 

The government has projected Rs16.545 billion as subsidy to Passco for wheat operation and wheat stock, freight subsidy on sugar export by TDAP, for supply of wheat to Gilgit-Baltistan and for support for wheat and sugar export.  The government has allocated Rs300 million in the head of sale of wheat to Fata.