Govt Presented With Plan to Cut Electricity Rates By Rs. 5 Per Unit

The federal government has been presented with a massive relief plan whereby a lump sum payment of Rs. 4 trillion would be made to Independent Power Producers (IPPs) in exchange for an Rs. 5 per unit reduction in electricity bills for all categories of consumers, high-level sources told ProPakistani. The Ministries of Finance and Energy have proposed to the government that capacity payments due in the next 3-5 years could be consolidated and paid in advance to IPPs which would help cut the power tariff by at least Rs. 5 per unit. Sources said the government wants to ease the IPPs’ payment burden and reduce revolving credit issues by pooling funds and making these lump sum payments in advance. According to the proposal, the energy ministry has suggested that the Finance Division can start by arranging the required financing. After arranging the necessary amount, the Ministry of Finance would transfer the funds to the Ministry of Energy for disbursement to IPPs. Sources added that the Finance Division wants approval from the International Monetary Fund (IMF) for this proposal before doing anything. It is pertinent to mention here that Prime Minister Shehbaz Sharif has been briefed on these proposals, but no final decision has been taken yet. Officials from both the Finance and Energy ministries have been collaborating for the past week to develop a viable plan to reduce power bills on priority.