Inflated Power Bills: IMF Rejects Proposal For Tariff Adjustment, Subsidy 

Another tariff hike of over Rs7 per unit is on the cards

Inflated Power Bills: IMF Rejects Proposal For Tariff Adjustment, Subsidy 

The International Monetary Fund (IMF) rejected the proposal for any tariff adjustment or provision of additional subsidies, even though the authorities claimed that their collection of electricity bills for August had reached close to expectations, reported The News on Tuesday.

Pakistan has asked the IMF to permit spreading out upcoming quarterly tariff adjustments (QTAs) and fuel price adjustments (FPAs) of Rs7.50 per unit over the next four to six months in light of the IMF's serious objections to the government's proposal to provide relief to the poor against the exorbitant power bills.

As per sources, "Pakistan has asked the IMF for the staggering of QTA and FPA over a period of four to six months, so it may also require some additional cost on which both sides will have to agree."

According to the sources, the problems in the electricity industry are still present in light of QTA's obligation to raise prices by around Rs5 per unit in the current month and by about Rs2.72 per unit for FPAs. Overall, a rate increase of more than Rs 7 per unit is anticipated.

The QTAs will be calculated based on losses experienced from April to June as a result of decreased unit consumption, rising interest payment costs, and exchange rate movements.

The September bill will likely include a total price increase of Rs7.50 per unit with the regulator's approval because the FPA is designed to account for an increase in the price of imported fuel.

The power ministry's high-ups said that bill collection has increased for August 2023 and is now on par with expectations. They contend that in order to reduce the exorbitant costs, they would need to make a number of QTA and FPA requests to the IMF.

According to the power ministry's analysis of energy bills for various categories, the cost of power for individuals using 400 units would drop from Rs21000 in August 2023 to Rs16963 in September and Rs11356 in October when QTAs and FPAs were taken into account.

The fees for individuals utilising 300 units would also decrease, from Rs13000 in August to Rs10,000 in September, and then to Rs8000 in October 2023.

The winter will begin in October, so it was anticipated that the problem of increased expenses would be remedied.

The official said that they would urge the Nepra to calculate the upcoming tariff changes taking seasonality trends into consideration because consumption increased in the summer months but declined in the winter; therefore, the tariff adjustment should be done taking this seasonality trend into consideration.