The K-Electric (KE) has sought Rs 3.4 billion from the federal government as the first installment from the prime minister’s relief package under which a subsidy of Rs 5 per unit has been approved for domestic consumers using up to 700 units a month and commercial non-ToU consumers having a sanctioned load of less than 5 KV.
The International Monetary Fund (IMF) has yet to support this measure despite the hectic efforts by the economic team led by Finance Minister Shaukat Tarin.
According to the KE’s provisional invoices, the total subsidy due is Rs 13.602 billion for four months (March-June, 2022) of which the first installment due to be released is Rs 3.4 billion. The second installment (due advance) amounts to Rs 3.4 billion and the remaining two installments at the beginning of each month at the rate of Rs 3.4 billion comes to Rs 6.801 billion.
In a letter sent to the federal government, KE’s Chief Financial Officer Aamir Ghaziani has said the first installment amounting to Rs 3.4 billion, required to be released at the start of implementation of the PM’s package as per the notification concerned, is still pending release.
He requested the government to immediately release the first installment and initiate the process for the release of the second in advance in accordance with the notification.
“Incentive package is already being implemented and timely release of advance subsidy is important, considering the already strained working capital position of the company due to exorbitant fuel prices impacting its ability to make payments for power purchases and/or fuel supplies,” Mr Ghaziani said, adding that timely release of subsidy amount is critical to bridging the demand-supply gap and for a smooth and reliable supply of electricity to consumers.
On March 7, the Economic Coordination Committee (ECC) approved the incentive package announced by the prime minister regarding the reduction in the price of electricity for Discos and KE’s commercial consumers having sanctioned load of less than 5 KV and domestic consumers having monthly consumption of up to 700 units (except lifeline consumers) as eligible consumers for the scheme.
According to the notification, an approved package of Rs 5 per unit by way of reduction in bills for eligible consumers will be worked out based on the applicable notified scheme of tariff for the relief period of four months (March to June 2022).
The ECC also approved a supplementary grant of Rs 106 billion under the head of TDS and its release to the Power Division for implementation of the PM’s relief package. The subsidy shall be released by the Finance Division and AGPR as an advance at the beginning of each month divided in four equal installments. The first installment will be released immediately and the remaining releases will be required at the start of each month. The adjustment papers will be submitted after due reconciliation subsequently.
The story was originally published in Business Recorder on April 03, 2022.
