BISP Electricity Subsidy 2024 Update
The government of Pakistan has taken a new and unique decision to provide relief in electricity bills. Now, the BISP Electricity Subsidy 2024 Update to poor consumers will not be given on the electricity bill, but directly in the form of cash. This new system will be run with complete transparency through the Benazir Income Support Program (BISP), so that only the deserving people can benefit.
Under this new model, consumers who use 200 units or less of electricity in a month will be given a subsidy of up to 60 percent. The subsidy amount will be transferred to the bank account, so that no one gets additional benefit or loss. BISP data is being used to help only poor families.
More interestingly, the government is also in talks with the IMF to provide relief to the industrial sector. Cheap electricity will be provided to industries that work in the second shift of the night or are related to the digital field such as data centers and crypto mining. If these proposals are approved, they could prove to be a new turning point for Pakistan’s economy.’
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Government’s Big Decision to Support Poor Electricity Users
According to details shared with the Public Accounts Committee, the federal government will now transfer electricity subsidies in the form of cash payments. The decision is part of a new subsidy model that uses Benazir Income Support Programme (BISP) data to identify deserving individuals. By linking it to BISP, the government plans to ensure that only the genuinely poor benefit from this program.
Who Will Get the BISP Electricity Subsidy in 2025?
The Secretary of the Power Division informed the committee that nearly 58% of electricity consumers in Pakistan fall under the category of low users, consuming 200 units or less per month. These users will receive up to 60% subsidy on their electricity bills, but now in the form of cash transfers using BISP’s system. This means that the financial aid will be directly sent to the accounts of those who qualify.
Category of Protected Consumers Likely to End
In the last few years, the number of protected electricity users has grown by 5 million. However, the government is now working on removing this protected consumer category altogether. Instead, BISP data will be used to determine who qualifies for help, allowing the government to focus on helping only the most vulnerable citizens.
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Industrial Sector Electricity Support under IMF Talks
The government is also working with the International Monetary Fund (IMF) to explore ways to provide low-cost electricity to the industrial sector. These discussions aim to reduce production costs for industries and boost economic growth.
Two Proposals Sent to IMF for Low-Cost Power
The Power Division has sent two major proposals to the IMF:
- Offer affordable electricity to industries operating during the second shift, based on international market rates.
- Provide cheap electricity to new sectors like crypto mining, data centers, and emerging industries.
While the IMF has not yet responded, the government is hopeful that once approved, these proposals will also be sent to the Federal Cabinet for final clearance.
IMF Approval and Next Steps for Implementation
If the IMF agrees, the government will seek cabinet approval and then begin implementing these new electricity policies. The aim is to provide relief to both low-income households and the industrial sector through a more efficient and fair system.
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Rising Capacity Payments Add to Electricity Cost
An important issue discussed in the committee was the sharp rise in capacity payments. In 2015, these payments were around Rs. 141 billion, but by 2024, they had increased to Rs. 1,400 billion. The rise is mainly due to the new LNG and coal-based power plants added in recent years.
Impact of Imported Coal on Power Costs
The use of imported coal has played a big role in increasing electricity costs. As fuel prices rise in the global market, it becomes more expensive to produce electricity, which in turn affects the subsidy budget and consumer bills.
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Conclusion
The BISP Electricity Subsidy 2024 is a big step towards improving the way subsidies are given in Pakistan. By moving to cash-based support using BISP data, the government is trying to ensure that only the poor and needy get the help they deserve. This move, combined with ongoing efforts to reduce electricity costs for industries, could lead to a more stable and fair power system in the country.
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