Fixed Tax of Up to Rs. 450 Per Month For Electricity Consumers On the Cards

The government team is gearing up to meet with the International Monetary Fund (IMF) in a few days to discuss the possibility of lowering tariffs for industry by up to 11.75 cents per unit from 14 cents per unit without offering any subsidy.

If approved and executed, this would impose a flat tax of Rs. 50 to Rs. 450 per month on lifeline and protected consumers, reported Business Recorder.

The Power Division proposed:

  1. Add a small fixed cost for lifeline/protected users. The impact of this would range from Rs. 50 to Rs. 450 each month.
  2. Add a fixed fee to unprotected categories that utilize more than 100 units and reduce their variable rate, ensuring that their net monthly bill increase is less than Rs. 1,000/month.
  3. Apply a higher fixed charge of Rs. 3,000/month to single-phase consumers who use more than 700 units per month to encourage them to switch to three-phase meters.
  4. Decrease tariff for three-phase meters with loads of 5kW or above to decrease their cross-subsidy burden and encourage single-phase consumers with monthly usage of more than 700 units to move to three-phase connections.
  5. Discourage the current usage of multiple connections in one house;
  6. Achieve a 25 percent reduction in cross-subsidies to domestic consumers. This pricing structure will cut the subsidy to domestic consumers using less than 400 units by Rs. 161 billion.

The Power Division contends that the implementation of fixed charges and a reduction in variable tariffs would also encourage higher usage.

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