Islamabad: The Power Division said that after the government came into power, cross-subsidy in the power sector has been reduced by Rs 123 billion.
According to the Power Division, the total volume of cross-subsidy has been cut from Rs 225 billion to Rs 102 billion. The per-unit subsidy burden has also been reduced from Rs 8.9 to Rs 4.02.
The Power Division said that industrial electricity rates, including taxes, have been reduced from Rs 62.99 per unit to Rs 46.31 per unit. The average electricity price per unit has come down from Rs 53.04 to Rs 42.27.
Officials said the government shut down inefficient power plants and successfully renegotiated agreements with Independent Power Producers (IPPs). Due to these measures, electricity prices have decreased.
The Power Division said the government has introduced a package of Rs 22.98 per unit on additional electricity consumption for three years to encourage higher usage.
It added that work has started on a plan to eliminate circular debt. Once circular debt is removed, consumers will get relief of Rs 3.23 per unit.
The Power Division said that due to off-grid solar users, the number of protected consumers has doubled to 22 million, increasing the burden on the power sector.
Commercial and bulk supply consumers are still bearing a higher cross-subsidy burden than industrial consumers, the division said.
Officials said power tariffs reflect the government’s broader social and economic policies. The government is exploring different options to further reduce the cross-subsidy burden, including subsidy reforms and debt refinancing.
