Govt weighs changes to electricity slab system, Senate told

The government is considering changes to the electricity tariff slab system that can sharply increase bills for consumers whose monthly consumption exceeds 200 units, the Senate was told on Tuesday.

ISLAMABAD: The government is considering changes to the electricity tariff slab system that can sharply increase bills for consumers whose monthly consumption exceeds 200 units, the Senate was told on Tuesday.

Energy Minister Awais Ahmad Khan Leghari said the government was examining ways to reform the system, under which consumers who cross the 200-unit threshold can lose their protected status.

He was responding to a calling-attention notice submitted by Pakistan Muslim League-Nawaz (PML-N) Senator Abid Sher Ali regarding tariffs charged by electricity distribution companies and the financial burden on consumers.

Abid Sher Ali said a consumer whose monthly consumption rises from 200 to 201 units could face a tariff increase from Rs15 to Rs30 per unit, potentially resulting in a much higher bill. “This cruel slab system effectively punishes the poor and drains the common man for months,” he said.

Leghari acknowledged the problem and said the ministry was working to remove the six-month restriction on protected-consumer status.

He said two options were under consideration: increasing the threshold from 200 to 250 units, or allowing consumers to regain protected status in any month in which their consumption fell to 200 units or less. The proposed changes would remove the six-month penalty, and the government would need about six weeks to finalise a plan, he said.

Leghari said the number of protected consumers had risen from 10 million to between 20 million and 25 million over the past two years, partly because of increased solar-energy use. He said some protected consumers were not poor, adding that the proposed mechanism would target subsidies at people living below the poverty line and lower-middle-income households.

Turning to the power sector’s finances, Leghari said circular debt had fallen to between Rs1.6 trillion and Rs1.67 trillion and was no longer rising annually. The government aimed to eliminate the debt within four years under a financing-reprofiling scheme, he said.

He added that the Rs3.23-per-unit debt-servicing surcharge would also be abolished over the same period.

Leghari said consumers had yet to benefit from reduced distribution-company losses because the savings had not been passed on to them, with the Finance Ministry bearing the cost of those losses.