IMF strongarms Pakistan government into imposing power surcharge on consumers

The federal government has yet again bowed down to the conditions laid down by the International Monetary Fund (IMF) and has fulfilled another stringent requirement. The Economic Co-ordination Committee (ECC) has approved collecting Rs335 billion in surcharges from consumers to cover losses, pay debts and provide financial assistance to the electric power sector.

According to the new announcement, consumers will be charged a surcharge of Rs3.23 per unit.

The revenue generated from the surcharge will be used to pay the power generation companies. The new rates will remain applicable until the federal government pays the due charges. The electricity surcharge will remain in effect even after 2023-24.

The decision was taken in a meeting of the Economic Coordination Committee (ECC) of the Cabinet. Finance Minister Ishaq Dar chaired the meeting that surrendered in front of the IMF.

K Electric customers will face additional pressure as the government allowed the Company to increase the per unit rate by Rs1.56 per unit in the current month and then by Rs6.11 per unit in April and May. The decision was taken to bring electricity rates in line with other distribution companies.

An official of the Power Division said that the government is also planning to increase the electricity rates for commercial consumers after the peak hours (8:00PM onwards). The decision is being planned after the authorities failed to close markets at night.

The federal government has also ended the subsidy for farmers to fulfill the IMF demands. The per unit rate for agricultural consumers has been increased to Rs3.60. Farmers will now receive electricity at Rs16.60 per unit instead of Rs13.

Farmers were given a subsidy of Rs3.60 under the Kisan Package. By increasing the electricity rates for farmers, the government will get an additional Rs14 billion by June 2023.

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