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Print Print 2023-01-12

IMF wants up to Rs7.50/unit power tariff raise

  • Seeks increase to recover over Rs 700 billion from consumers as previous commitments made by the government were not met
Published January 12, 2023

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.

No increase in electricity tariff under consideration: energy ministry

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

Comments

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Muhammed Jan 12, 2023 07:31am
Rampant increase in generation capacity blindly following the summaries prepared & presented by bureaucrats for their petty gains have brought the nation to its knees.
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Faisal Waheed Jan 12, 2023 09:54am
Govt should cut their expenditures instead of imposing more burden on the depressed people of the country. They are expending lavishly and demanding from people to give their hard earned money. Is this justice?
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Yogesh (India) Jan 12, 2023 11:55am
Who is running Pakistan IMF ??? Why not give IMF a chance to run your country? I think Pakistanese have no ball to run the country.Why not give it back to us India....
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MNQ Jan 12, 2023 05:21pm
@Yogesh (India), We don't have dollars and our govt. is importing luxury cars, our army is looting country. All politicians and army officials are bullshit!!!
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Asad Jan 13, 2023 09:18am
@Yogesh (India), that's a last option when all the world destroyed specially not Wil ne not on the world mape
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Samson Jan 13, 2023 08:25pm
Love your enemy and bless all those who curse you., hateness can never prevail.
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