Govt to end slab system punishing consumers crossing 200-unit threshold

Islamabad, Power Minister Awais Leghari announced plans to abolish the electricity slab system that penalizes consumers for exceeding a 200-unit monthly usage threshold. Under the current system, those using up to 200 units receive a subsidy of around Rs13 per unit, while any consumption above 200 units results in higher per-unit costs and a six-month prohibition from the subsidy.

Leghari stated work was accelerating to eliminate this punitive structure. He proposed two alternatives: raising the threshold to 250 units or allowing consumers to regain subsidy eligibility for the month they reduced their consumption to 200 units. The minister acknowledged the need for a new subsidy model based on income rather than consumption alone.

Currently, the number of protected consumers, those eligible for the subsidy, has risen from 10 million to between 20-25 million due to solar energy adoption. However, the minister emphasized that the subsidy should target those below the poverty line and lower-middle income groups. Turning to the power sector's financial health, Leghari reported a decline in circular debt to approximately Rs1.67 trillion, no longer increasing annually.

The government aims to eliminate the debt within four years under a restructured financing scheme and abolish the debt servicing surcharge of Rs3.23 per unit. The Power Division's annual budgetary support from the finance ministry was Rs1.18 trillion in 2024, expected to decrease to between Rs700bn-750bn this year, reducing the fiscal burden.

Meanwhile, the government is implementing a national artificial intelligence ecosystem, investing $1 billion by 2030 and accelerating AI adoption through the National AI Advancement Initiative. Pakistan joined the China-led World AI Cooperation Organisation as a founding member in July.