Energy Minister Rejects 300-Unit Electricity Subsidy Proposal

Islamabad — Federal Energy Minister Owais Ahmed Laghari has dismissed reports about increasing the electricity subsidy limit to 300 units for protected consumers.

He said that offering electricity at the 300-unit rate would cost the government Rs 275 billion annually, which is not feasible under current economic conditions.

Speaking in the National Assembly, the minister explained that there is currently about 7,000 megawatts of extra electricity available in the system. Subsidies and discounted tariffs are given only to consumers who use less than 200 units per month.

He added that over 35 million electricity consumers are connected to the national grid. Of these, those using between 0 and 100 units receive up to 90% subsidy, while users consuming between 100 and 200 units get up to 70% subsidy.

The minister warned that if the limit on 201 units is removed, the restriction would need to be raised to 251 or 301 units, affecting the subsidy system and tariff slabs.

Owais Laghari also said that the number of consumers using less than 200 units has reached 18.3 million. In the last nine months, electricity for these users has become 60% cheaper. Additionally, cross-subsidy from industry consumers has reduced from Rs 255 billion in June 2024 to Rs 94 billion now.

The tariff for electricity, including taxes, has decreased from Rs 48.7 per unit to Rs 38.4 per unit. Subsidized consumers have seen a 58% tariff reduction, while non-subsidized users received 11% to 17% cuts.

The minister further announced that the federal cabinet has approved competitive electricity markets for the industrial sector. The regulator has been asked to set wheeling charges, and the government decided not to purchase additional electricity for now.