ISLAMABAD: The government would not charge FCA from electricity consumers using less than 200 units monthly after taking into confidence the International Monetary Fund (IMF) and the World Bank (WB).

This was stated by Finance Minister Miftah Ismail while addressing a press conference on Friday. He said the decision not to charge FCA would entail Rs20-21 billion fiscal impact and resources would be created in this regard.

The finance minister said that Pakistan has met the $4 billion financing gap as pointed out by the IMF and now the Fund Executive Board meeting would approve on Monday the release of $1.17 billion tranche to Pakistan under the Extended Fund Facility (EFF).

The minister said that Pakistan has met the financing gap of $4 billion – $3 billion from Qatar, U$1 billion from Saudi Arabia on account of oil on deferred payments as reported in the media, and $1 billion investment by the United Arab Emirates.

About relief to the consumers using less than 200 units, the minister said 56 percent consumers would be provided relief on account of the FCA besides agriculture tube well consumers. He said in total 17.1 million electricity consumers out of 30 million would not be charged fuel price adjustment. Rich and commercial consumers as well as industrial sector etc would be charged FCA, he added.

PM Shehbaz announces waiving fuel charge adjustment for 17mn power consumers

The minister said that those using 200 units do not need to pay their old bills as the government would issue them new bills without FCA and those who have paid their bills would be reimbursed FCA in the month of September 2022.

The minister said that electricity was made in the month of May 2022 very expensive because one day the demand peaked to 30,000 MW and the government was had to run expensive power plants to meet the demand besides increase in electricity by Rs7 per unit as required by the IMF in July and August led to increase in electricity bills. The finance minister said that the IMF and the WB were taken on board in protecting the consumers using less than 200 units.

The federal minister said the prime minister has also formed a committee to review the fuel adjustment charges on consumers using 200 to 300 units and explore possibilities to provide them relief.

He said that Qatar will invest three billion dollars in Pakistan and the IMF board will sit between Monday and Tuesday night after which the money will be released to Pakistan. The minister said that the flood caused massive damages both to the lives and infrastructure as well as crops. He added that Rs40-60 billion livestock have been swept away by the floods, billions of rupees houses have been erased from the ground, and crops were damaged. The minister feared that floods would have a negative impact on the GDP growth and if water did not recede, the next crops would also be affected.

The minister said that notification has been issued for deferment of fixed tax on retailers and went back to the old system for the next three months. The minister said that the prime minister held a meeting with the potential donors and today held a meeting with Islamabad-based ambassadors. He said that WB has repurposed $370 million for flood and appealed to the affluent people of the country to contribute.

The finance minister further stated the government of Qatar has shown interest to invest $3 billion vestment in (i) long-term lease of Pakistani airports with management control;(ii) construction of terminals at seaports;(iii) purchase of LNG plants and;(iv) solar power as the government wanted to produce 8,000 MW cheaper solar electricity. The prime minister directed to hire international adviser for LNG power plants, he said, if nothing happened, Qatar would invest in share market of Pakistan

He said that there was speculation that Pakistan wanted to sell Roosevelt Hotel to Qatar and stated that no discussion was held either about Roosevelt Hotel or Pakistan International Airlines.

The Finance Ministry provided Rs28 billion BISP for providing Rs25,000 cash assistance to the flood-affected families and provided Rs5 billion to the NDMA.

Copyright Business Recorder, 2022

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