ISLAMABAD - To ensure the swift revival of International Monetary Fund programme, the federal cabinet has approved the revised circular debt management plan which includes transferring of an additional Rs 65 billion to the power consumers till June 2023 and withdrawal of Rs 65 billion subsidies from Export and Agricultural sectors from 1st March.
Over the weekend, the federal cabinet has approved the revised CDMP, which also includes the transfer of Rs 73 billion to the electricity consumers on account of quarterly tariff adjustments during the ongoing calendar year 2023, official source told The Nation. An additional amount of approximately Rs 250 billion will be recovered from electricity consumers by June 2023.
Under the plan, a special financing surcharge of Rs 3.39 per unit will be levied on the electricity, sources said. The special financing surcharge of Rs 3.39 per unit will be made part of the base tariff which will enhance the base tariff from the existing around Rs 24 per unit to over Rs27 per unit.
The government also plan to recover Rs 73 billion from the electricity consumers from February 2023 till November 2023 on account of four quarterly adjustments of the FY 2023. As per new plan, during two months (February and March) of the first quarter of 2023, an additional Rs 3.21 per unit will be transferred to the power consumers on account of 1st quarterly adjustment of FY 2023.
From March to May it has been decided that an additional Re 0.69 per unit will be charged from the power consumers on account of 2nd quarterly adjustments of the FY 2023, sources said.
Similarly, from June to August an additional Rs 1.64 per unit will be recovered from the consumers on account of the 3rd quarter adjustments of the FY 2023, sources said.
During the months from September to November, electricity consumers will be charged Re 0.98 per unit on account of the quarterly adjustments for the 4th quarter of FY 2023, said the sources.
Government of Pakistan is providing relief to the electricity consumers in form of different subsidy schemes. Under the proposed action plan to deal with the subsidy issue, it has been decided to revise the base case assumption of allocation of Rs 355 billion subsidy for FY 2023. It has been decided that the Zero-Rated Industry (ZRI) and Kissan Subsidy Packages will be discontinued from 1st March 2023.
It has also been decided under IMF pressure, that from 1st March, the government will discontinue the subsidy of Rs 65 billion for export (Zero Rated Industry) and agriculture sectors. The decision to discontinue subsidy from 1st March will have an impact of Rs 51 billion on the export sector and Rs 14 billion on agriculture sector under Kissan package.
In October last year, the incumbent government had set the electricity tariff at Rs19.99 per unit for the export sector. It was announced that the annual burden of the subsidy would be around Rs 90-100 billion.
It is worth to mention here that the government had approved that private agriculture consumers across Pakistan shall be provided relief of Rs 3.60 per unit in their current base rate of Rs 16.80 per unit. Additional Supplementary Grant of Rs 28 billion with effect from 1st November 2022 in the head of TDS had been provided for implementation of PM’s Kissan Package.