ISLAMABAD: The federal government has said that it does not plan to impose any new taxes, despite a revenue shortfall of Rs1.56 trillion.
This was stated during a public hearing held recently. Officials from the Power Division informed the participants that after a review of electricity tariffs for government-run power distribution companies, consumers are expected to save around Rs1.50 trillion. This saving will result in a similar decrease in government revenue. However, the officials confirmed that no new taxes will be introduced to make up for the loss.
They did mention that the government may reduce the subsidies it currently gives to electricity consumers to cover the shortfall.
During the hearing, participants appreciated the government’s efforts to renegotiate agreements with power plants. These new agreements aim to reduce capacity payments. The government will now pay the power plants only for the electricity it actually buys, instead of fixed capacity charges. A specific amount will still be paid under capacity charges, but the overall burden is expected to be less.
It was also shared that the government has reduced gas supply from Sui Southern Gas Company by 220 MMCFD and from Sui Northern Gas Company by 150 MMCFD. Participants suggested that mixing this reduced gas supply with imported liquefied natural gas (LNG) could help bring down electricity prices even further.
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Officials informed that the Central Power Purchasing Agency has signed revised agreements with several government-owned power plants. These include National Power Parks Management Company Balloki, National Power Parks Management Company Haveli Bahadur Shah, Central Power Generation Company Limited Guddu, and National Power Generation Company Limited Nandipur. The goal is to lower the burden of electricity bills on consumers.
