Prime Minister Shehbaz Sharif on Tuesday announced the government would retain for the next three months the existing electricity tariffs for lifeline consumers who utilize up to 200 units of power, adding this will be funded through cuts to the development budget.
“The household consumers who consume up to 200 units of electricity will get a subsidy for three months—July, August, September,” he told a press conference in Islamabad, adding it would cost the government Rs. 50 billion to subsidize this measure. Claiming this decision would benefit 92 percent of residential electricity consumers, he said the government was slashing its development budget to pay for the subsidy, as it was cognizant of the issues facing the public.
Since the government unveiled a tax-heavy budget with massive hikes for utility prices, it has come under severe criticism over its failure to provide any relief to the general public, already reeling under rampant inflation. The government has maintained these measures are necessary to unlock a deal with the International Monetary Fund, with the prime minister stressing the government had no choice but the approach the global lender or risk economic disaster.
According to the prime minister, the unveiled subsidy would allow for lifeline consumers to pay Rs. 4-5/unit for electricity, adding it would also apply to consumers of K-Electric. Stressing on the need for Pakistan to shift to cheaper sources of energy, particularly solar, Sharif acknowledged the legitimacy of the public’s anger over higher taxes and hefty utility bills. However, he said, the government had attempted to distribute the load by expanding the tax net and collecting revenue from previously undertaxed segments, including the real estate sector.
Expressing the hope that once summer subsides and electricity consumption declines the public would be more amenable to higher utility prices, the prime minister stressed that the country had no choice but to adopt tough measures to achieve economic stability. He also slammed the PTI government, noting his government would not announce any unfunded relief schemes or subsidies in a reference to an initiative of then-prime minister Imran Khan, who had reduced fuel and electricity prices in violation of a deal with the IMF.
During his address, Sharif also called on the country’s “elite” to pay their due share and help the country recover economically. He claimed the government was also working to downsize its own operations to save money, with a view to facilitating the public.