The tariff hike would not impact the poorer citizens. Consumers using up to 200 units, constituting 63 percent of the total, would be exempt from the tariff increase.
On Monday, Prime Minister Shehbaz Sharif announced the government’s decision to increase power tariffs in line with the International Monetary Fund (IMF) deal, aiming to address the unsustainable public debt in the power and gas sector.
However, he emphasized that the tariff hike would not impact the poorer citizens. Consumers using up to 200 units, constituting 63 percent of the total, would be exempt from the tariff increase.
Additionally, a partial subsidy would be provided to the consumers using up to 300 units per month, comprising around 31 percent of the total domestic consumers.
Prime Minister Shehbaz Sharif acknowledged that the IMF’s stringent conditions necessitated the increase in electricity prices. Nonetheless, he stressed that the burden of these price rises should not fall on the protected segments of society.
The IMF had highlighted the acute liquidity conditions in the power sector, with mounting arrears and frequent power outages. Arrears, which accumulate due to subsidies and unpaid bills, emerged as a significant issue during the eight months of negotiations between the IMF and Islamabad before the deal was reached.
The accumulated debts to power generation companies amounted to nearly Rs2.6 trillion ($9.04 billion), while the government debt to the gas sector stood at around Rs1.6 trillion ($5.56 billion). To address this pressing concern, the Prime Minister remarked that dealing with this financial burden required a war footing approach.
During the soft launching of several Special Economic Zones in Sheikhupura, Prime Minister Shehbaz Sharif highlighted the importance of utilizing modern technology and alternative energy in the industrial sector to enhance export competitiveness in the international market.
PM also emphasized the need to harness the potential of solar, wind, and hydel energy for cost-effectiveness, especially given the surge in oil prices.