Electricity to become costlier in Pak as govt hikes tariff by Rs 1.39/unit

Pakistani government on Friday increased the base power tariff by Pakistani Rs 1.39 per unit to fulfil the International Monetary Fund demand to stay in its programme, local media reported

Pakistani government on Friday increased the base power tariff by Pakistani Rs 1.39 per unit to fulfil the International Monetary Fund (IMF) demand to stay in its programme, local media reported.

The increase will become effective from November and continue till the end of the financial year, June 2022, The News International reported.

According to the Pakistani publication, the tariff has been increased after the government withdrew Pakistani Rs 72 billion subsidy, which it was provided to various categories of power consumer. Now, the government has reduced the subsidy requirement from earlier Rs 240 billion to Rs 168 billion.

Economists are worried about this development, saying it will bring high inflation in the country, as already the commodities' prices in the international market including crude, petroleum products and food are on the rise, The News International reported.

Earlier, the government had promised it would not increase the tariff. But after ongoing negotiations with the IMF to resume the USD 6 billion stalled programme, the government had no options but to raise the power tariff, said the publication.

Meanwhile, Federal Minister for Energy Hammad Azhar, addressing a press conference along with State Minister for Information and Broadcasting Farrukh Habib said the increase of 1.39/unit "had been made while keeping in view the ballooning power circular debt".

"We now have the capacity to generate enough electricity; therefore we want to increase the demand. We introduced an industrial package last year which has been successful as we have seen a 15% increase in its demand," The News International quoted Azhar as saying.

He added, "we have also seen a 6-7 per cent increase in the demand for electricity as the peak hours for the industrial sector has been removed.