ISLAMABAD – The federal government has chalked out a plan to reduce electricity prices by Rs6 per unit to extend more relief to masses who are upset over higher power tariff in the country.
The government has shared the plant with the International Monetary Fund (IMF). However, the global financial institution has not yet approved the plan and has sought further details.
Under this plan, federal and provincial governments will arrange funding of Rs2,800 billion. The Centre will contribute Rs1,400 billion by shrinking development budget, withdrawing some subsidies announced in the budget, taking out commercial loans, and using dividends from state-owned enterprises to arrange the amount.
The remaining Rs1,400 billion will be partly sourced from the funds allocated to the provinces under the National Finance Commission (NFC). However, the Khyber Pakhtunkhwa government has clearly refused to provide its share from the NFC allocation, and the other provinces have not yet responded.
The government has planned to use the amount to shut down the inefficient power plants, terminate or renegotiate contracts with Independent Power Producers (IPPs).
Currently, electricity prices in Pakistan are record high with per unit price reaching up to Rs70. The federal government has provided temporary relief of up to 51% for consumers using up to 200 units, but they will have to pay the full amount starting from October.
The average electricity price per unit in Pakistan stands at Rs44, which the government aims to reduce to Rs38 after getting consent from the IMF.
Consumers using 301 to 700 units pay Rs58 per unit, including various taxes while the rate is Rs64 for those consuming electricity more than 700 units. Commercial users pay Rs76 per unit.
