Pakistan government drastically raised the electricity prices

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Pakistan government drastically raised the electricity prices

ISLAMABAD – Federal Minister for Energy Omar Ayub Khan announced on Wednesday to raise electricity prices by Rs1.95 per unit adding to miseries of public facing severe inflation.

Addressing a press conference flanked by Planning Minister Asad Umar and PM’s advisor on power Tabish Gohar, he said that the decision will put an additional burden of Rs 200 billion on public.

The power division will issue the notification in this regard after getting nod from the National Electric Power Regulatory Authority (Nepra).

The present rate of the electricity stands at Rs13.35/unit and it will reach Rs 15.30 once the surge is approved.

Omar Ayub also lashed out at the Pakistan Muslim League-Nawaz (PML-N) for massive circular debt in the power sector.

The latest surge is part of the total Rs3.34 increase approved by Prime Minister Imran Khan in December with an aim to resume International Monetary Fund’s (IMF) $6 billion loan programme, which is stalled for about ten months.

The IMF agreed to the rescue package in 2019 as the South Asian country was grappled with a balance-of-payments crisis.

So far, Pakistan has managed to receive $1.44 billion under the loan program. The country was hoping to secure another tranche of about $450 million in March 2020 but the IMF and Islamabad failed to reach an understanding during the second quarterly review.

Succumbing to the pressure by the global lender, PM Khan has given in-principal approve to accept IMF’s demand about rising power tariff but it is yet to decide the increase will be made at once or gradually.

Following the approval, the economic team of the prime minister has initiated consultation on price hikes and circular debt of Rs1.2 trillion.

Raising power tariff is one the basic conditions imposed by the IMF and there would be no headway in second review of the loan programneuntil Pakistan issued notification for new electricity prices, said local media citing sources.

It was also revealed in the reports that the government was considering revoking tax exemptions for corporate sector as this move would generate Rs200 billion additional taxes.