REGULATION | Cesar Tordesillas, India

Pakistan increases consumption limit of subsidized consumers

Pakistan has increased the maximum amount of electricity that can be consumed with tax benefits from 50 to 100 units per month.

The decision was taken by the Prime Minister Syed Yousaf Raza Gillani during the Second Energy Conference, in order to provide relief to the low income group. The Ministry of Water and Power had moved the proposal.

Earlier, consumers using 1 to 50 units of electricity per month were exempted from tariff increases and paying the General Sales Tax. Now, domestic consumers who limit consumption to 100 units per month will be treated as ‘life-line’ consumers and benefit from exemption from tax and tariff increases.

The tariff under the new slab will automatically be reduced, and consumers will be subsidised by about Rs3.40 per unit. According to a power ministry official, the existing tariff of ‘life-line’ consumers or those with consumption of up to 50 units was Rs1.87 per unit, whereas those consuming up to 100 units per month had to pay Rs4.54 per unit. The latter also paid GST at Rs 1.16 per unit.

An official said that around 10.3 million consumers use 50 units of electricity per month nationwide. After the increase in the consumption limit to 100 units, about 3.4 million more consumers will be added to the beneficiaries of subsidised electricity. The total number of ‘life-line’ consumers will now stand at 13.7 million.

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