The International Monetary Fund (IMF) has firmly turned down Pakistan’s request for relief in high electricity rates for distressed citizens. Despite the federal government’s claim that electricity bill collections for August aligned with expectations, the IMF has ruled out any possibility of adjusting tariffs or providing additional subsidies.

Meanwhile, Pakistan has put forth another proposal to spread out the upcoming quarterly tariff adjustments (QTAs) and Fuel Price Adjustments (FPAs) of Rs. 7.50 per unit over the next four to six months. Issues in the power sector persist, with an urgent need for QTAs to be raised by Rs. 5 per unit this month and FPAs by Rs. 2.72 per unit. This totals to an anticipated increase of over Rs. 7 per unit.

The QTAs will be calculated based on losses incurred from April to June due to low consumption, high-interest payments, and currency devaluation.The planned FPA increase will account for rising fuel prices, potentially resulting in a Rs. 7.50 per unit hike in the September bill if approved by NEPRA.

Image Source: Dunya News

Combining QTAs and FPAs, electricity costs for consumers using 400 units would decrease from Rs. 21,000 in August 2023 to Rs. 16,963 in September and further to Rs. 11,356 in October, according to calculations for various consumer groups.

For those using 300 units, charges would decrease from Rs. 13,000 in August to Rs. 10,000 in September and Rs. 8,000 in October 2023. Additionally, the government has requested NEPRA to consider seasonal trends when calculating future tariff adjustments.

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