ISLAMABAD: The Economic Coordination Committee of the cabinet has approved a hike in power tariff for households consuming over 300 units per month, but has decided to give massive relief in electricity prices for the country’s agricultural sector.
Sources told Geo News that the committee decided that electricity prices would not be raised for domestic consumers using 300 units or less every month. However, households that consume between 300 and 700 units per month will witness a rise in electricity prices of roughly 10 percent, or Rs1.18 per unit.
A 15% hike will be introduced for those consuming between 300 to 700 units.
The decision was taken by the committee headed by Finance Minister Asad Umar today.
The rise in power tariff is less than anticipated and has been approved keeping in mind the recovery of dues and the need to address the issue of circular debt, sources privy to the meeting quoted Finance Minister Asad Umar as saying.
Meanwhile, sources said the committee also decided that it would provide relief in electricity prices for the agricultural sector, slashing rates by almost 48 percent from Rs10.5 to Rs5.5.
The committee discussed matters pertaining to the power sector and the economic indicators.
The government has not released an official statement regarding the changes in power tariff structure, but Finance Minister Asad Umar is likely to announce the measures soon.
During the last meeting on October 22, ECC members had deferred the decision on an increase in the power tariff and decided to meet today to consider it.
Sources had said, “The government wants to increase the power tariff in two phases. The Ministry of Power has sought permission from National Electric Power Regulatory Authority (NEPRA) regarding increasing the power tariff by Rs3.74/unit in two phases, however, the government is facing difficulty in increasing the price after NEPRA’s new tariff.”
“NEPRA has upheld that the phase-wise rise will further increase the government’s economic problems,” they had added.
Earlier this month, an International Monetary Fund (IMF) team which visited Pakistan called for a further hike in gas and power tariffs.
An IMF team led by Harald Finger visited Islamabad from September 27 to October 4 to discuss Pakistan’s economic situation and exchange views on necessary policies for economic stabilisation and sustainable and inclusive growth. At the end of the visit, Finger “welcomed the policy measures implemented since last December” which include 18 per cent cumulative depreciation of the rupee, interest rate increases of cumulatively 275 bps, fiscal consolidation through the budget supplement proposed by the minister of finance, a large increase in gas tariffs closer to cost recovery levels, and the proposed increase in electricity tariffs.