ISLAMABAD: Prime Minister Shehbaz Sharif has approved further hike in the electricity tariff to strike a deal with the International Monetary Fund (IMF).
The new power tariff is set to inflate the annual base tariff by 33% for the consumers utilizing 200 and more units in a month.
Prime Minister Shehbaz Sharif took the decision in a meeting held at PM House on Monday.
Premier chaired the online meeting from Lahore.
An average increase of Rs7.74 per unit is expected in the base tariffs while consumers falling in the upper consumption slabs will have to pay much more than others.
As the PM has approved this major demand of the IMF, the government’s economic team is set to shared the revised circular debt reduction plan with the Fund’s team today.
According to the officials, the IMF wants a 50% increase in prices but the government would propose 20% to 33% hike in power tariffs.
Pakistan and the IMF started technical level talks on January 31st and now both the sides are holding policy level discussions from Tuesday.
Pakistan and the IMF will conclude talks by Feb 9, 2023.
If the IMF approved the measures proposed by the government, IMF mission chief Nathan Porter and Finance Minister Ishaq Dar will meet today or tomorrow to to give final shape to these measures.
So far, the IMF has sought 12 rupees/unit increase in power tariff to offset the Rs675 billion circular debt and additional budget subsidy.
In this budget, the Power Division sought Rs675 billion in more subsidies, bringing the total needs to over Rs1.03 trillion to manage the circular debt and subsidies mechanism.
Meanwhile, the IMF also rejected the government’s demand to keep up to 300 units consumers safe from the tormenting power tariff hike.