IMF Says No to Lowering Electricity Bills

The International Monetary Fund (IMF) has outright rejected Pakistan’s request for relief in inflated electricity rates for aggrieved citizens. Following the federal government’s assertion that electricity bill collection for August was close to estimates, the lender has ruled out the possibility of any tariff adjustment or provision of additional subsidy. Meanwhile, Pakistan has tabled another proposal to allow the staggering of upcoming quarterly tariff adjustments (QTAs) and Fuel Price Adjustments (FPAs) of Rs. 7.50 per unit over the next four to six months. Issues in the power sector have persisted amid the urgent need for QTAs to be increased by Rs. 5 per unit in the current month and FPAs by Rs. 2.72 per unit. In total, a rate increase of more than Rs. 7 per unit is planned. The QTAs will be calculated using losses from the April-June period as a result of low usage, high-interest payments, and exchange rate devaluation. The planned hike in FPA will account for imported fuel prices, therefore an increase of Rs. 7.50 per unit is on the cards for the September bill if NEPRA gives its approval. After combining QTAs and FPAs, power prices for consumers using 400 units would be decreased from Rs. 21,000 in August 2023 to Rs. 16,963 in September and Rs. 11,356 in October, according to a workout of electricity bills for different groups. The fees for individuals who use 300 units will be decreased from Rs. 13,000 in August to Rs. 10,000 in September and Rs. 8,000 in October 2023. The government has reportedly also asked NEPRA to calculate upcoming tariff adjustments while keeping seasonal trends in mind.