The federal cabinet has made another move to enforce a significant condition imposed by the International Monetary Fund (IMF): raising power tariffs.
According to sources, the federal cabinet approved an increase in the basic power rate, which was done through a circulation summary.
The National Electric Power Regulatory Authority (Nepra) has forwarded a decision to the federal government to raise the basic power rate by an average of Rs5.72 per unit.
According to government sources, the federal cabinet's decision would be forwarded to Nepra for uniform tariffs.
Following Nepra's approval, the federal government will release a notification increasing the basic power rate.
According to the sources, under IMF requirements, the federal government must raise the basic power rate by July 10.
According to Nepra's decision, the rise in the basic rate for electricity will impose an additional cost of around Rs600 billion on consumers of electricity.
Nepra will raise the basic power rate for fiscal year 2024–25, with the authorized rise taking effect on July 1, 2024, according to sources.
Nepra has authorized an increase in the average basic power cost for fiscal year 2024–25 from Rs 29.78 to Rs 35.50 per unit.
The federal government hiked the basic power tariff by Rs7.50 in the previous fiscal year, which ended on June 30, and by Rs7.91 per unit in fiscal year 2022–23.
The federal government increased the basic energy rate in a lump sum for the fiscal year 2023–24, whereas the rise in the fiscal year 2022–23 was done in three parts.
A state minister told Reuters that Pakistan hopes to get a staff-level agreement on an IMF bailout of more than $6 billion this month after meeting all of the lender's conditions in its annual budget.