Govt. Proposes Industrial Power Tariff At Rs. 8 Per Additional Unit With No Peak Tariff

The federal government has decided to change the industrial electricity tariff at Rs. 8 per unit on additional consumption over and above existing consumption for three years, Business recorder reported quoting sources close to Prime Minister’s Special Assistant on Power.

It was also decided that the current system of peak and off-peak tariffs should be scrapped considering surplus power available.

A meeting on industrial support package was held under the chairmanship of the prime minister on Oct 21, in which this decision was taken as the continuation of the government’s Covid-19 economic relief and stimulus package announced earlier, as well as to promote Small and Medium Enterprises’ (SMEs) growth and employment.

The Power Division has been directed to move a summary seeking formal approval from the Cabinet in this regard and is given the deadline of October 27, 2020, for implementation of the decision.

The current industrial tariff for the four categories ranges from Rs 17.34 per unit to Rs 20.40 per unit in peak and off-peak hours. This reduction will potentially have an impact on the tune of billions and thereby the Finance Ministry might need IMF’s approval before this policy can be put into action.

The newspaper reported, “If industrial productivity increases in the coming months, further tariff reduction will be looked into to further incentivize industry including SMEs”. The meeting also decided that the subsidy expected on the industrial support package shall be paid by the Finance Division on the actual monthly cost.

Earlier, the government had planned to fix industrial tariffs at Rs. 13 per unit through a reduction of Rs. 6 per unit.

The meeting was attended by federal ministers Hammad Azhar, Asad Umar, Umar Ayub, Trade Adviser Abdul Razak Dawood, Dr. Ishrat Hussain, Governor Sindh, Chairman Federal Board of Revenue (FBR), and other senior officials.

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