ISLAMABAD: Finance Minister Miftah Ismail has ruled out the possibility of zero load-shedding in the country in the near future due to the high cost of electricity production as well as higher line losses and low recovery of billed amount.
Addressing a press conference here on Wednesday along with Minister for Defence, the finance minister in response to questions stated that zero load-shedding in the country would increase the per unit cost of electricity to Rs60 per unit and make it impossible for the consumers to endure fuel charge adjustments (FCA).
He said that relief provided to the consumers in terms of FCA from 200 to 300 units has been deferred and not waived off and would be collected at an appropriate time. He said that the government would increase the budget deficit and mobilise resources from other means to meet the cost of cash disbursement to the flood victims as well as FCA charges of consumers using 200 units monthly.
The finance minister also held the previous government responsible for the expensive electricity in the country primarily because during the last four years not a single watt of solar energy was added in the system and no transmission and distribution project was undertaken.
FCA exemption to cause Rs21bn impact: Miftah
The finance minister did not mention the impact of tariff increase in the cost of electricity during the last four months but sounded optimistic that there would be some relief in electricity prices from the month of October. However, when asked about the possibility of some relief in fuel prices, he said that any reduction in petrol and diesel would depend on international prices.
He said that the previous government had neither been able to reduce line losses nor increase recovery of billed amount during the last four years and committed to the International Monetary Fund (IMF) for collection of sales tax as well petroleum levy on petroleum price and increase in power tariff. He said that his predecessor committed to the Fund in writing but failed to fulfill the commitment, instead provided an amnesty scheme and electricity and petroleum prices were reduced by Rs5 per unit and Rs10 per liter respectively.
He said that the credit goes to the present government for the revival of the IMF programme to save the country from default.
He said that as the damage need assessment of the flood has not yet been done, so it is hard to ascertain the actual quantum of losses although some varying figures were coming up and once the damage assessment is done then the government would decide about the future course of action whether to approach donors and countries or not.
Ismail said that there is no need to import essential commodities from India at this point in time because China is sending tomatoes to Pakistan besides the prices of tomatoes and onion have also fallen in the domestic market in the last few days.
The finance minister said that the rupee was expected to gain strength against the dollar after the revival of the IMF programme but due to flood and possibility of an increase in the import bill on account of prices of essential commodities, there was a slide in the rupee against the dollar. He said that cotton and other crops have been damaged by the flood. However, he said that there is no immediate need to import cotton from India or any other country at this point in time.
The Finance Ministry would be releasing Rs10 billion to the NDMA for tents as well as funds for cash disbursement to four million female of Rs70 billion would be generated or diverted from other resources. Khawaja Asif said that as finance minister Miftah Ismail has done good work and saved the country from default and the party would consider making him a senator.
Copyright Business Recorder, 2022