Govt plans phase-out of protected power consumers

The government is working on phasing out the protected electricity consumer category, a top official informed lawmakers on Tuesday, in a move that would replace subsidised tariffs with direct cash transfers for low-income households starting in 2027.

Briefing the Public Accounts Committee (PAC), Power Division Secretary Dr Muhammad Fakhr Alam Irfan told members that 58% of electricity consumers in Pakistan currently use 200 units or less per month and benefit from up to 60% subsidies on their bills. 

Over the past few years, the number of protected consumers has risen by 5 million, he added.

He added that the eligibility for future subsidies will be determined through the Benazir Income Support Programme (BISP) database, signalling a shift toward targeted support for the most vulnerable.

The secretary also shared two proposals that have been submitted to the International Monetary Fund (IMF) to allow for additional electricity supply at reduced rates. 

The first proposal would enable existing industries to avail electricity at global rates for second-shift operations. The second proposes concessional tariffs for new industries, cryptocurrency ventures, and data mining operations. 

Talks with the IMF are still ongoing and a formal response has not yet been received. If approved, the proposals will be presented to the federal cabinet for ratification.

During the meeting, PTI leader Umar Ayub Khan said the previous government had already introduced this facility during the COVID-19 pandemic. He urged the present administration to take decisions independently rather than waiting for IMF directives.

PPP MNA Shazia Marri questioned why load-shedding persists despite surplus electricity generation, noting that Sanghar faces outages lasting up to 14 hours. She also alleged that pressure from vested interests delayed power generation from Thar coal for years and admitted that opposition to the Sahiwal coal project had now been proven misguided.

The Irfan said that electricity is currently being produced from Thar coal and that efforts are underway to expand its use. A railway line is being planned to transport Thar coal to other power plants, and the Jamshoro power station is being shifted to use Thar coal as well. 

He further said that no new power plants will be set up using imported fuel over the next ten years. The government’s energy policy will prioritise investments in hydropower, indigenous coal-based generation, and the promotion of renewable energy sources.

The power secretary said that steps are also being taken to reduce the cross-subsidy burden on industrial and commercial users, aiming to create a more balanced and equitable power tariff structure.