Complying with the IMF conditions, the government has decided to raise the electricity tariff by Rs8 per unit, reported 24NewsHD TV channel.
Sources informed that the IMF mission which is currently in Pakistan for the technical and policy-level talks for the release of its $1.18 billion tranche has been apprised of government’s decision to increase the electricity price.
This hike will be separate from the regular quarterly adjustment charges.
Sources said after getting approval from Prime Minister Shehbaz Sharif, the Pakistan economic team would provide new circular debt plan to the IMF mission today.
In order to bring down the circular debt, the increase in basic power tariff has become paramount, sources said adding that the government would also take measures to reduce the line losses.
The increase in gas prices is also in the pipeline.
The government is expected to announce its decision in a couple of days.
The technical talks between the Pakistan and the IMF were concluded on Monday and they are holding policy-level talks today which will be ended on February 9.
The government is all set to raise the electricity prices as it has been left with no other option but to receive additional payment from consumers to retire the power sector debt hovering at Rs1,000 billion through tariff measures as the IMF had made it clear that it was no longer acceptable to park the gaps in power holding companies.
As per the breakdown, the electricity base tariff has to be jacked up by more than Rs7 per unit to generate almost Rs600bn for the power sector on top of three quarterly adjustments for another Rs75bn during the current fiscal year.
The combined impact of base tariff adjustment and quarterly adjustment would average around Rs10 per unit in the first round — starting in February — but would remain around Rs7.65 per unit in the second phase i.e. March through May with quarterly tariff adjustments, power ministry sources said.
This will be other than expenditure cuts and additional revenue measures expected to be announced in a couple of days.
Moreover, gas price adjustments and immediate removal of subsidies for industrial consumers are also set to be modified as the government desperately attempts to meet the IMF’s demands.
Dastgir says consensus reached between Pakistan, IMF
Meanwhile, Power Minister Khurram Dastgir Khan has said that Pakistan is about to sign a deal with the IMF as consensus has been achieved on almost all issues between the two sides.
IMF shows distrust over Lesco recovery method
On the other hand, the IMF reposed its distrust over the recovery method of Lahore Electricity Supply Company (Lesco) as different departments still owe Lesco a staggering Rs64 billion in outstanding dues.
Reporter Waqas Azeem and Shahid Sipra