Govt ends free electricity benefit for higher grade employees

ISLAMABAD – The government has made a significant policy shift by discontinuing the provision of free electricity to government employees in Grade 17 and above.

Instead of the electricity subsidy, eligible government employees falling under this category will receive a dedicated allowance. This decision was unveiled by the Secretary of Power, Rashid Langrial, during a press briefing.

Langrial revealed that a formal proposal outlining this alteration is anticipated to be presented before the cabinet in the imminent future.

Secretary Langrial emphasized that the determination of electricity tariffs is under the purview of the National Electric Power Regulatory Authority (NEPRA), rather than the government.

The pricing decisions established by NEPRA are founded upon three core variables: fuel expenses, currency exchange rates, and loan interest rates. Any upward fluctuation in these elements necessitates a corresponding tariff adjustment. Notably, heightened electricity consumption leads to reduced capacity costs, subsequently driving down the overall rate.

In terms of fiscal projections, Secretary Langrial highlighted that the envisaged baseline for the forthcoming year’s dollar rate is set at Rs 286. However, the current rate remains higher than this projection.

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He underscored that a substantial allocation of Rs 2 trillion has been earmarked for electricity procurement in the upcoming fiscal year.

Of the total consumer base of 30.5 million, a significant proportion—roughly 63 percent—fall within the usage bracket of up to 200 units. Merely 4 million consumers are equipped with air conditioning systems.

Langrial disclosed that the tax of Rs 8.92 per unit is aligned with conditions set forth by the International Monetary Fund (IMF). Additionally, a substantial amount of Rs 177 billion must be allocated annually to service Independent Power Producer (IPP) loans. The deficit between annual revenue and expenditure is estimated at Rs 976 billion, which is supplemented by government assistance.

The Secretary highlighted the pervasive issue of electricity theft, particularly prevalent in areas such as Azad Kashmir, the Federally Administered Tribal Areas (FATA), and Quetta. Notably, even affluent individuals in Karachi are receiving a subsidy of 10 rupees per unit. The financial toll due to electricity theft amounts to a staggering Rs 201 billion.