Punjab’s electricity subsidy package could face two-month delay

LAHORE: The Punjab government’s announcement of a Rs14 per unit relief for electricity consumers using 201 to 500 units per month is welcome news for households burdened by high electricity bills. However, bureaucratic hurdles are impeding the practical, timely, and effective implementation of this relief package.

Although the Punjab government has allocated Rs45 billion for this purpose, sources said that no disbursement mechanism was in place before the announcement, which could potentially delay the delivery of relief to consumers.

Sources said that DISCOs (electricity distribution companies) are not prepared to immediately transfer this relief to the public. They said that the electricity distribution companies are under the federal government, and there are legal complications in receiving direct subsidies from the province and passing them on to consumers.

In this regard, Punjab Government spokesperson and Provincial Information Minister Uzma Bukhari confirmed told Urdu News that the provincial government will sign memorandums of understanding (MoUs) with the electricity distribution companies. A summary has been sent to the federal government for approval, after which matters will be finalised, she said.

Also read: Punjab govt seeks estimates for Rs14 per unit electricity subsidy payments

She stated, “A subsidy of Rs14 per unit will be provided for electricity consumers using between 201 and 500 units in August and September bills.”

he added, “The federal government is already providing relief to consumers across Pakistan for usage of up to 200 units. With Punjab’s additional relief, both the poor and middle class will benefit during peak electricity consumption months.”

On the other hand, officials have noted that the DISCOs initially considered approaching the National Electric Power Regulatory Authority (NEPRA) for guidance on legal issues. However, it was later decided that the MoUs between the Punjab government and the power distribution companies would be signed under the supervision of the Ministry of Power and Energy. These agreements will require each DISCO to share customer data and billing information with the Punjab government, which will then release funds accordingly.

According to officials, there are practical difficulties, and it could take more than two months to finalise and implement these agreements. Nevertheless, the announced relief will be adjusted in consumers’ bills once the implementation gets under way.

Sources also mentioned that the Punjab government wants the relief details printed on every bill to inform consumers of the original bill amount and the reduction provided by the provincial government. However, DISCOs are hesitant to implement this due to operational challenges.

It is important to note that for the past two to three months, consumers in Pakistan have been grappling with high electricity bills. Household consumers have faced unprecedented hikes in their monthly bills, leading to protests across the country.

The Jamaat-e-Islami staged a two-week sit-in on Murree Road in Rawalpindi, ending the protest after reaching an agreement with the government which promised to provide relief to consumers nationwide by reducing electricity rates and addressing the issue of capacity charges of IPPs.

There are over 20 million electricity consumers in Punjab, with the majority falling within the 201 to 500-unit range. The Islamabad Electric Supply Company alone has about 4 million customers in this category.

Experts argue that the real benefit of this relief package depends on how quickly and effectively the government can overcome the bureaucratic and operational obstacles currently in its way.

They said that while the allocation of funds is a positive step, the success of the scheme hinges on the government’s ability to compel DISCOs to promptly pass on the relief to consumers without undue delay.