Possible Electricity Bill Relief in August-September: Consumers Could See Reduction by Rs. 2 Per Unit Over Next 7 Months
In a potential move to provide relief to consumers, the government is considering a reduction of 30 to 35 percent in electricity bills. This reduction could bring immediate respite to households. The impact of this reduction, however, might be unevenly distributed during the colder months.
Officials from both the electricity and taxation divisions have put forth a proposal for immediate public relief. This proposal is expected to be presented to Prime Minister Anwar-ul-Haq Kakar during a Federal Cabinet meeting today (Tuesday).
While official sources have remained silent, insiders suggest that one of the proposals is to lower a portion of the electricity bills for August and September. This reduction aims to offer immediate relief to consumers. However, the potential downside could be the uneven spread of reduced bills across five winter months.
Notably, the government has opted not to reflect the effects of the last quarter’s adjusted tariff from fiscal year 23, which amounts to Rs. 5.40 per unit. Instead, the government plans to spread this increase randomly over the winter months, from October 2023 to March 2024. This strategy aims to soften the impact of price shocks during this period, effectively reducing the winter tariff from Rs. 5.40 to Rs. 2.31 per unit.
Regarding reductions in GST and surcharge taxes on electricity bills, the Ministry of Finance will need to gain approval from the International Monetary Fund (IMF). However, officials have highlighted that the IMF’s revenue generation target, set at Rs. 9.2 trillion, cannot be compromised.
In summary, the government’s potential steps towards electricity bill relief could bring welcome respite to consumers, with some adjustments to the billing system. However, the impact of these changes might vary for consumers during the winter months. Discussions are ongoing, and further details will likely emerge after the proposal is presented to the Prime Minister.”