In response to the International Monetary Fund’s (IMF) payout of $1.2 billion under the newly agreed $3 billion bailout program, the federal government is expected to boost power tariffs by Rs. 4-6 per unit today
The IMF wants Pakistan to raise its power tariff, but it has been intimidated because the National Electric Power Regulatory Authority (NEPRA) and Finance Ministry (MoF) have reached an agreement on the hike that is based on realistic figures of dollar value, inflation, GDP growth, and growth in electricity sales in FY2023-24, according to a national daily.
According to the report, both NEPRA and the MoF are nearing completion of the draft to raise the base tariff today. He stated that the energy authority will make more changes to the draft and disclose the amended tariff rates later today.
The official explained why NEPRA did not use the dollar’s value of Rs. 290 as the benchmark for the federal budget. Since the IMF agreed to the stand-by arrangement, the situation has changed and the dollar has fallen to Rs. 277, which may assist cut inflation in FY24.
Previously, NEPRA had developed three options for new base tariffs: less than Rs. 8 per unit, less than Rs. 7 per unit, and less than Rs. 6 per unit. It previously decided a basic pricing hike of up to Rs. 5 per unit.
Under new terms, NEPRA and the MoF have jointly agreed to raise the base tariff up to Rs. 6 per unit, with an announcement due later today.