Pakistan plans to abolish tariff penalties after 200 units — Dawn

In Pakistan, the government is preparing changes to the tariff category system for household electricity consumers, under which exceeding the threshold of 200 units per month by even one unit leads to a substantial tariff increase and the loss of benefits for six months. Energy Minister Awais Leghari stated this in the Senate, Dawn reports.

Under the current mechanism, consumers who use up to 200 units of electricity per month belong to the protected category and receive a subsidy of about 13 Pakistani rupees per unit. If the limit is exceeded by even one unit, the tariff may rise to 33 rupees per unit, and the consumer loses eligibility for the preferential category for the next six months.

Reform options

Leghari said the ministry is considering two options: raising the threshold from 200 to 250 units or abolishing the six-month restriction. Under the second option, consumers will be able to return to the protected category in the month when they reduce their electricity use to 200 units.

According to the minister, the final plan is expected to be prepared in about a month and a half. The authorities are also working on a targeted support mechanism under which subsidies will be provided based on income rather than solely on consumption volumes.

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Targeted subsidies

Leghari noted that the number of protected consumers has increased from 10 million to 20–25 million over the past two years. According to him, this was facilitated by the use of solar energy: some households that consume 700–800 units in total limit their grid consumption to 200 units in order to retain benefits.

The minister also stated that the subsidy for the protected category amounts to 65% and is used by both low-income and affluent consumers. The new system, he said, should direct assistance to people living below the poverty line, as well as groups with lower middle incomes.

State of the energy sector

Leghari said that the energy sector's circular debt has declined to about 1.67 trillion rupees and is no longer increasing annually. The government, he said, plans to eliminate it within four years and also abolish the 3.23-rupee-per-unit surcharge intended for debt servicing.