ISLAMABAD: Minister for Energy, Hammad Azhar Monday said reduction of electricity tariff by Rs 5 per unit will be adjusted through budgetary reallocation and will be circular debt flow neutral.

Recently, Secretary Power Division, Syed Asif Hyder had informed Senate Standing Committee on Power that the federal government is considering imposing projected Fuel Charges Adjustment (FCA) of Rs 2.71 per unit on consumers on permanent basis, to be adjusted at the end of each fiscal year, after calculating financial impact on fuel. Asked if Power Division’s proposal has been approved, Minister for Energy, responded in the negative.

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When asked, will reduction of Rs 5 per unit announced in tariff be in the FCA, the minister said, “FCA or base tariff, same amount will be required for same result. Reduction will be in FCA.” Answering the question as to what will be the impact of reduction in tariff on circular debt the Minister responded that it will be fully funded subsidy so no impact on circular debt.

Another official told BR that the government may not notify Rs 5.93 per unit increase in FCA for January 2022 and continue to existing raise of Rs 2.80 per unit till June 30, 2022.

Copyright Business Recorder, 2022