Government complies with IMF by withdrawing subsidy on electricity

This article was last updated on April 16, 2022

Canada: Free $30 Oye! Times readers Get FREE $30 to spend on Amazon, Walmart…
USA: Free $30 Oye! Times readers Get FREE $30 to spend on Amazon, Walmart…

The federal government has received harsh criticism for announcing an unprecedented power hike of 40 to 2010 per cent ahead of national Eid holidays. The ruling party chanted slogans of resolving power shortages before general elections this year, but has so far failed to take any practical step towards a solution.

The decision has been taken to comply with a deal signed with IMF this year. The government has to withdraw PKR 140 billion from annual subsidy on electricity and redirect the burden to domestic and agricultural consumers. According to the Ministry of Water and Power, the power hike does not apply to domestic consumers who are using up to 200 units of electricity. However, those using power from 201 to 300 units will now have to pay PKR 14 per unit instead of PKR 8.11.

In August, the government announced up to 116 per cent power tariff hike for commercial and industrial consumers. The changes applied to commercial, industrial and bulk consumers from August 1 while the domestic consumers would be paying higher prices from October 1. The government is aiming to generate PKR 162 billion additional revenue from current power tariff increase.

The Business Recorder quoted a government official saying, “We were extending PKR 362 billion subsidy to consumers last year and the financial impact of current increase has been estimated at PKR 162 billion which implies domestic consumers still enjoy subsidy of PKR 200 billion. The government will continue to extend PKR 200 billion subsidy to domestic consumers.”

Share with friends
You can publish this article on your website as long as you provide a link back to this page.

Be the first to comment

Leave a Reply

Your email address will not be published.


*