- Seeks increase to recover over Rs 700 billion from consumers as previous commitments made by the government were not met
ISLAMABAD: The International Monetary Fund (IMF) has reportedly sought an increase in electricity tariff up to 7.50 rupees per unit across the board, to recover over Rs 700 billion from consumers as previous commitments made by the government were not met, well informed sources told Business Recorder.
An increase of Rs 7.91 per unit was agreed with the Fund and World Bank for last fiscal year but it was only partially implemented till July 1, 2022. IMF had also been assured that FPA and QTAs will be passed on to the consumers on time but their implementation had been delayed.
The sources said, IMF had been assured that recovery will be 93.83 percent, but in fact it remained less than 90 percent (FY-22 at 90.43 percent). Transmission and Distribution losses were greater than 17 percent (FY-22 at 22.16 percent) against the commitment of 15.83 percent, made with the IMF and World Bank.
Electricity demand remained depressed at 44 billion units during first quarter of current fiscal year (FY-22 at 44.4 percent) whereas IMF had been given the understanding of 45 billion units.
According to sources, government has extended subsidy of Rs 281 billion to K-Electric despite the fact that it was not budgeted.
IMF had also been given assurance that exchange rate for last fiscal year would be Rs 194/$ which remained at over Rs 200/$. Likewise, the Fund had been given words that KIBOR would be 10.5 percent while in fact it remained at 15 percent.
The government has also approved additional subsidies to the power sector of over Rs 200 billion despite the fact that IMF has clearly indicated that it would not allow any subsidy except those targeted to the poor segment of society.
The sources said the government staggered Fuel Cost Adjustment (FCA) in violation of commitments with the Fund and World Bank.
The sources said power sector budgeted requirement was of Rs 1.734 trillion whereas the government budgeted only Rs 570 billion.
Power Division has reportedly proposed to the government to amend NEPRA Act to impose surcharge to cover the gap of over 700 billion, in addition to existing Re 0.43 per unit.
Copyright Business Recorder, 2023