Pakistan Government Ends Electricity Subsidy for Low Usage Consumers
In a significant move, the Pakistan federal government has decided to withdraw the electricity subsidy for consumers using up to 200 units per month. Starting in October, these consumers will face increased charges, ranging from Rs 9 to Rs 29 per unit. Specifically, protected customers consuming up to 50 units will be charged Rs 9.39 per unit, while those using 51-100 units will pay Rs 13.64 per unit. Consumers using 101-200 units will see the highest increase, with a rate of Rs 29.21 per unit.
The National Electric Power Regulatory Authority (NEPRA) has also introduced a new surcharge policy for late bill payments. A 5% surcharge will apply to bills paid within three days after the due date, and a 10% surcharge for payments made beyond that period. However, no surcharge will be applied if payments are made within the three-day grace period following the due date.
Pakistan’s citizens have been facing a continuous rise in electricity prices, with 14 adjustments made from July 2023 to August 2024, resulting in an additional cost of over Rs 455 billion to consumers. The highest increase was Rs 7.06 per unit in March 2024. Citizens have urged the government to review the fuel adjustment mechanism to provide relief.
Doubts Revealed
Electricity Subsidy -: An electricity subsidy is when the government helps to pay part of the electricity bill for people, making it cheaper for them. In this case, the Pakistan government has stopped this help for people using up to 200 units of electricity per month.
Units -: Units in electricity refer to the amount of electricity used. One unit is equal to one kilowatt-hour (kWh), which is the amount of energy used if you keep a 1000-watt appliance running for one hour.
NEPRA -: NEPRA stands for the National Electric Power Regulatory Authority. It is a government organization in Pakistan that makes rules and policies about electricity, like how much it should cost.
Surcharge -: A surcharge is an extra fee added to a bill. In this case, if people pay their electricity bill late, they have to pay extra money as a penalty.
Fuel Adjustment Mechanism -: The fuel adjustment mechanism is a way to change electricity prices based on the cost of fuel used to produce electricity. If fuel prices go up, electricity prices might also increase, and people are asking the government to look at this system again.