- The International Monetary Fund (IMF) discontinued the electricity bill relief package to power consumers using over 200 units monthly in Pakistan today.
- Pakistan would only get relief in terms of delayed payments of bills, who continuously consume electricity under 200 units for six months.
The International Monetary Fund (IMF) has discontinued the electricity bill relief package for consumers using over 200 units monthly in Pakistan. As reported by ARY News, the IMF said circular debt would not come down if relief were given on electricity bills. On Pakistan’s relief plan, the people of Pakistan would only get relief in terms of delayed bill payments who continuously consume electricity under 200 units for six months.
Further, the IMF revealed that the aid will be withdrawn if the bill of a consumer crosses 200 units in six months. Earlier, the Caretaker Minister for Energy and Petroleum, Muhammad Ali, stressed that the IMF has not rejected the proposal to provide additional subsidies in power tariffs as the government deals with protests against inflated electricity bills.
The electricity sector has been facing troubles despite the quarterly tariff adjustments’ (QTA) mandate to raise rates by (PKR) 5 per unit in the current month and FPAs by (PKR) 2.72 per unit, as per sources. A rate increase of more than (PKR) 7 per unit has been planned. According to Geo News, the QTAs would be estimated using losses from the April-June period due to lower unit consumption, cost escalation of interest payments, and exchange rate movements.
Amid the Pakistani economy tensions, the country has increased the electricity base rate by Pakistani Rupees (PKR) 7.5 per unit in July. The National Electric Power Regulatory Authority (NEPRA) has permitted the federal government an increase of PKR 4.96/unit in base electricity tariff on July 14. According to the Dawn report, Pakistan’s caretaker government has already been seeking the power regulator to start charging another PKR 5.40 per unit quarterly tariff adjustment over six winter months starting in October instead of permissible in three months.
The leading cause of the current power tariff is current depreciation, which has accounted for almost 70 per cent. This has left the government with no option but to consider the IMF programme. Furthermore, a 10-12 per cent hike has been witnessed because of the interest rates. This has tied the government and the SBP’s hands under the fund programme.