Govt mulls slashing power tariff for industries
"Caretaker government to give a roadmap for reduction in capacity payments," says Energy Minister Muhammad Ali
January 02, 2024
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ISLAMABAD: Caretaker Federal Minister for Energy Power and Petroleum Muhammad Ali on Tuesday said the government was mulling to take a major step and cut electricity tariff for industries.
Speaking to Geo News, Ali said the caretaker government was going to accomplish a couple of big tasks as they had five to six weeks left before the elected government could take charge.
“We are trying to cut electricity tariff for industries because the industrial sector is subsidising households at the moment. There will not be jobs and exports unless the industry runs and the country cannot function if we don't have dollars,” he stated.
The energy minister said the government was also working on reducing the circular debt, adding that efforts are also being made to bring down the urea prices, which were too high.
“The caretaker government would give a roadmap for the reduction in capacity payments and urea prices,” he said.
Pakistan's export industry, facing turbulence because of a challenging economic outlook, had urged the government to lower wheeling charges for using the national grid's power transmission and distribution infrastructure, The News reported on December 7, 2023.
Already burdened by a high tariff of 14 cents per unit, the industry had sought transition to a competitive trading bilateral contract market (CTBCM) regime. This would have enabled them to purchase electricity from independent power producers (IPPs) at lower rates.
On October 12, the World Bank had reiterated its commitment to support Pakistan's power sector reforms aimed at getting rid of mounting circular debt, The News reported.
This multilateral donor had announced that it would provide a comprehensive privatisation template to Islamabad aimed at expediting the privatisation process of the Power Distribution Companies (Discos).
