ISLAMABAD: The Economic Coordination Committee (ECC) has approved a subsidy-neutral initiative offering discounted electricity rates for incremental consumption during the winter months (December to February). The package, targeting residential, commercial, and industrial consumers, aims to boost electricity demand amid high tariffs and economic challenges.
The initiative is expected to increase consumption by up to 16%, aligning with International Monetary Fund (IMF) requirements. The meeting, chaired by Finance Minister Muhammad Aurangzeb, also approved transferring Rs3.14 billion from the former Emergency Relief Cell (ERC) to the National Disaster Management Authority (NDMA) for relief operations.
The Power Division highlighted that rising tariffs and economic pressures had led to a demand drop of 6% last winter and 8% in FY2024. Average winter demand stood at 11,196 MW lower than in summer. Previous similar initiatives had driven consumption increases of up to 16% in earlier fiscal years.
The package applies to consumers exceeding 200 units monthly, including K-Electric users, offering discounts between 18% and 50% on incremental consumption. Rates for additional usage will be significantly reduced—30% to 50% lower than standard rates.
By shifting demand to electricity, the initiative seeks to optimize system generation capacity and reduce gas demand. Incremental consumption will be calculated using a weighted average of the last three years, ensuring the package remains subsidy-neutral.
Story by Khaleeq Kiani
