ISLAMABAD: Finance Division has reportedly shown willingness to allocate Rs 450 billion for power sector subsidy in FY 2023-24 as compared to Rs 350 billion for the outgoing fiscal year (2022-23), well informed sources told Business Recorder.

Power Division, sources said, had sought allocation of Rs 1.53 trillion on different accounts including subsidies for the FY 2023-24 and payment to CPEC IPPs but Finance Division has shared the number of Rs 450 billion, the sources added.

Power Division had sought an amount of over Rs 1.7 trillion for CFY to meet different obligations, but Finance Division earmarked only Rs 350 billion for power sector subsidies and other accounts, the sources maintained.

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Replying to a question, the sources said, Power Division has already taken action with respect to programme/loan conditions by International Monetary Fund (IMF) and World Bank.

Average tariff is likely to be increased by Rs 2.50 per unit through re-basing as National Electric Power Regulatory Authority (Nepra) has almost completed hearings of tariff petitions of all power Distribution Companies (Discos). Power Division, sources said, has also shared forecast consumption (kWh) for FY 2023-24 and head-wise breakup of the forecast against demanded subsidies.

According to sources, Power Division has also submitted working paper on justification of Fata subsidy arrears as requested vide Finance Division’s OM of May 4, 2023. Reconciliation strategy and timeframe of subsidy claims of each category and consequent release for the period from FY 2019-20 to FY 2022-23 has also been shared with Finance Division. Budget documents, however, showed that the government had earmarked Rs 490 billion for power sector in 2022-23 of which Rs 355 billion were for Pepco/ Wapda and KE was as compared to Rs 511 billion of 2021-22.

Copyright Business Recorder, 2023