The federal government’s proposed “Winter Package 2024,” aimed at boosting electricity consumption during the winter months, is currently in limbo due to conflicting reports regarding its approval by the International Monetary Fund (IMF).
Officials indicate that the government intends to reduce electricity tariffs by Rs 7-8 per unit for all consumers from December 1, 2024, to April 30, 2025, hoping to stimulate domestic demand and counter a significant drop in electricity usage—10-12% in the industrial sector alone.
This decline is attributed to high tariffs and a shift towards off-grid systems.
An online meeting between government representatives from the Power Division and the Finance Division and IMF officials raised questions about the projected increase in consumption and its economic impact.
While some officials claim the IMF has tentatively approved the package for three months, others assert that discussions are still ongoing.
The proposed package is primarily designed for industrial users, with a potential fixed rate of Rs 20-25 per unit.
However, residential users may be excluded from benefits, and the government is considering reducing subsidies for households to fund this initiative.
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The Ministry of Finance is withholding final approval until it receives a positive response from the IMF.
The Prime Minister is pressing for swift approval to enhance industrial operations. If sanctioned, the package would first be presented to the National Electric Power Regulatory Authority (Nepra) before implementation.
As electricity demand typically drops by 8,000 to 10,000 MW during winter compared to summer months, the government faces challenges from increased solar installations and shifting consumer behaviors.
A committee led by the Minister for Petroleum is also exploring options to increase electricity consumption through space heating, given that gas supply will be limited to specific times of the day for domestic users.
This latest proposal follows a previous attempt by the caretaker government, which sought IMF approval for a tariff reduction package that was ultimately rejected.
